MNI DATA ANALYSIS: Canada Wholesale Sales Beat Expectations>

By Yali N'Diaye

     OTTAWA (MNI) - Canadian wholesale sales rebounded 1.0% to a record 

C$63.8 billion in October, more than offsetting the disappointing 0.7% 

contraction in September, data from Statistics Canada showed Thursday. 

     Analysts in a MNI survey had expected sales to increase 0.4% on the 

month. 

     On a 12-month basis, however, sales growth slowed to 2.7% from 

3.8%, the slowest pace since December 2016. An unfavorable base effect 

partly explained this performance, as monthly sales rose 2.0% in October 

2017. 

     Inventories were up 0.9% in October, about the same pace as sales, 

leasing the inventory-to-sales ratio unchanged at 1.38. 

     Details of the report were generally strong. While September's 

estimate was revised down to -0.7% from -0.5%, August was revised up by 

0.2 percentage points as well to +0.1% from -0.1%. 

     Gains on the month were almost entirely due to stronger volumes, as 

real sales expanded by 0.9%, more than erasing the 0.8% decrease 

recorded in September. 

     - MACHINERY AND EQUIPMENT LEADS 

     Sales increased in four of seven subsectors in October, 

representing 68% of wholesale trade. 

     A particularly good news was the 2.8% increase in sales of 

machinery, equipment and supplies to a record C$13.4 billion, more than 

offsetting the 2.1% drop recorded in September. The reading was 

especially strong given that it was driven by a 2.7% growth in volumes, 

the largest increase since December 2017. 

     The Bank of Canada is particularly focused on business investment 

as it expects its increase to boost capacity and in turn exports growth. 

     There have been other positive signs in October on that front, with 

real imports of industrial machinery, equipment and parts up 1.6%. 

Meanwhile, manufactured machinery sales increased 2.7% in volume over 

the month. 

     Another strong contributor to wholesale sales in October was 

personal and household goods, which posted a gain of 3.1%, owing to a 

3.0% increase in volumes. 

     On the downside, autos and parts fell 1.7% on the month to C$10.6 

billion, the lowest level since November 2016, as volumes contracted 

1.5%. 

     Excluding autos and parts, sales rose 1.5% in October, mainly on 

higher volumes (+1.4%). 

     Regionally, sales increased in four provinces, representing 71% of 

wholesale trade, led by Ontario, with a 2.3% gain to a record C$33.0 

billion. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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