MNI DATA IMPACT: Canada Wholesales +1.7% Vs +0.2% Forecast>

By Greg Quinn

     OTTAWA (MNI) - Canadian wholesale blew past forecasts in April with 

a 1.7% gain that was the fastest in more than two years. 

     The MNI economist consensus was for a 0.2% increase, suggesting the 

April GDP report due Friday may also come in stronger than expected. 

Combined with the March wholesale sales gain of 1.4%, it's the best 

two-month increase since the end of 2015 when Canada was recovering from 

a crash in exported crude oil prices. 

     Motor vehicle and parts sales rose 3.2% in April to the highest 

dollar value since November 2017. Sales are up 10.9% since January. 

Machinery and equipment sales rose 2.2% in April, and household 

goods by 3.1%, Statistics Canada said Monday from Ottawa. 

     The gains add to evidence that Canada's economy shifted into a 

broad-based recovery in the second quarter of 2019, following a 

temporary soft patch around the start of this year. That's one reason 

Bank of Canada officials have kept a neutral message on interest rates 

even as other central banks are talking about adding fresh stimulus. 

     Wholesale sales climbed in five of seven major categories 

representing 86% of total receipts. One of the strongest gains was in 

the province of Alberta where sales climbed 5.9%, a sign that oil and 

gas producers may be ramping up again after a painful bout of falling 

prices and production cuts.  

     Even one of the Bank of Canada's background concerns around the 

recovery -- inventories of unsold goods -- showed improvement. The ratio 

of inventories to sales fell to 1.39 in April from 1.40 in March, the 

second monthly decline in a row.

     Another sign of durable momentum was that the monthly wholesale 

sales gain was the fifth in a row. 

     Excluding price changes, sales volumes rose 1.6% in April. That 

suggests wholesale sales will make a bigger impact to the next GDP 

report than retail sales, which were inflated by higher gasoline prices. 

--MNI Ottawa Bureau; +1-613-314-9647: greg.quinn@marketnews.com 

[TOPICS: MACDS$,M$C$$$]