Wholesale trade, December 2016

Released: 2017-02-20

Wholesale sales rose 0.7% to $57.3 billion in December, a third consecutive gain. Six of the seven subsectors, representing 82% of total wholesale sales, reported increases. The machinery, equipment and supplies subsector and the building material and supplies subsector contributed the most to the advance.

In volume terms, wholesale sales were up 0.9%.

Chart 1 
Wholesale sales increase in December

Higher sales in six subsectors

The machinery, equipment and supplies subsector reported the largest gain in dollar terms in December, increasing 2.5% to $11.6 billion. Every industry within the subsector reported higher sales, led by the construction, forestry, mining, and industrial machinery, equipment and supplies industry (+3.9%). This was the largest dollar value gain for the industry since January 2016. Imports of industrial machinery were up in December.

In the building material and supplies subsector, sales rose 1.4% to $8.0 billion, a third consecutive monthly gain. All three industries in the subsector increased, led by the lumber, millwork, hardware and other building supplies industry, up 1.4% to $4.1 billion, a third consecutive increase.

Sales in the food, beverage and tobacco subsector rose 0.9% to a record $11.2 billion. Increases were recorded in all industries within the subsector, with the food industry (+0.9%) contributing the most to the gain.

The personal and household goods subsector rose 0.9% to $8.2 billion, on the strength of gains in half of the industries in the subsector. A 1.4% increase in the pharmaceuticals and pharmacy supplies industry led the gains, and mostly offset the industry's 1.6% decline in November.

The motor vehicle and parts subsector reported the lone decline, down 2.1% to $10.3 billion on weaker sales in the motor vehicle industry (-4.5%). Sales in the industry have now declined for two consecutive months and have reached their lowest level since November 2015. Imports and exports of motor vehicle and parts were also down in December.

Sales up in six provinces

Wholesale sales were up in six provinces in December, representing 46% of total wholesale sales. In dollar terms, Quebec contributed the most to the gain.

In Quebec, sales increased for the second time in five months, up 2.9% to a record $10.8 billion, primarily on higher sales in the building material and supplies subsector and the machinery, equipment and supplies subsector.

Sales in Alberta grew 2.3% to $6.3 billion, a third consecutive increase. Gains were recorded in six subsectors, led by the machinery, equipment and supplies subsector.

Saskatchewan recorded a second consecutive gain, rising 4.4% to $2.2 billion. Higher sales in the agricultural supplies industry led the increase.

Sales in British Columbia rose for a third consecutive month, up 1.4% to a record $5.9 billion in December. The machinery, equipment and supplies subsector and the food, beverage and tobacco subsector contributed the most to the gain.

Both Nova Scotia (+1.3%) and Prince Edward Island (+8.4%) saw gains that partially offset declines in November.

Sales in Newfoundland and Labrador fell 25.2% to $399 million in December, offsetting most of the 39.9% increase in November that brought the province to its highest sales level on record. While declines were widespread across subsectors, the miscellaneous subsector was the largest contributor to the drop.

In Ontario, sales edged down 0.2% to $28.7 billion, a second consecutive decrease. The decline was led by the motor vehicle and parts subsector, offsetting gains in other subsectors.

Manitoba (-0.5%) and New Brunswick (-1.2%) reported declines in December, each with lower sales in four subsectors. This was the fifth decrease in seven months for both provinces.

Inventories increase

Wholesale inventories rose 1.1% to $74.3 billion in December, a fifth consecutive increase.

Chart 2 
Inventories rise in December

Inventories in the motor vehicle and parts subsector (+2.5%) reported the largest increase in dollar terms, reaching their highest level on record in December.

In the miscellaneous subsector (+1.7%), inventories rose for the third time in ten months.

The food, beverage and tobacco subsector posted its ninth consecutive advance, with inventories up 1.8% to their highest level on record.

Inventories in the machinery, equipment and supplies subsector (+0.6%) increased for the fifth consecutive month.

Higher inventories were also reported by the personal and household goods subsector (+0.6%) and the building material and supplies subsector (+0.2%).

The inventory-to-sales ratio rose from 1.29 in November to 1.30 in December. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

The year 2016 in review

Canadian wholesalers generated sales of $674 billion in 2016, up 3.1% compared with 2015. This was the seventh consecutive annual increase.

The increase was partially attributable to higher prices as sales in volume terms were up by 2.2%.

Except for energy-driven provinces (Newfoundland and Labrador as well as the Prairies), all provinces experienced growth.

The motor vehicle and parts subsector leads the way

Imports (+6.2%) and exports (+9.5%) of motor vehicles and parts increased in 2016. Canadian manufacturers also saw 2016 sales rise 11.8% over 2015. These three indicators mostly explain the performance of the wholesale motor vehicle and parts subsector (+8.8%), which recorded the largest gain in dollar terms in 2016.

Overall, Ontario (+5.7%) recorded the largest increase of wholesale sales in dollar terms among the provinces and territories, and the largest portion of the increase came from the motor vehicle and parts subsector.

The wildfires of Fort McMurray

One key event of 2016 was the wildfires that affected the Fort McMurray area in Alberta.

From a gross domestic product perspective, a leading indicator of the rebuilding effort is the building material and supplies subsector.

Preliminary results up to December 2016 (eight months after the start of the wildfires) showed that the biggest impact from the Fort McMurray rebuild on wholesale trade has not yet been felt.

Indeed, the sales in the three industries making up the subsector decreased in 2016 for Alberta over 2015. These figures were consistent with the housing starts and housing under construction in 2016 over 2015 for Alberta. The only industry that showed a rebound in the last four months of 2016 was the lumber, millwork, hardware and other building supplies industry. However, the exports of forestry products also increased, so it was difficult to conclude that the rebound was due to the rebuilds, which may not have fully started yet.

The price of food in the news in 2016

For wholesalers in the food industry, the upward trend continued in 2016.

Chart 3 
Wholesale sales of food by month, Canada, 2015 and 2016 – Seasonally adjusted

In fact, food industry wholesale sales in Canada have been increasing in general throughout 2015 and 2016. Levels in the second half of 2016 were higher than the first half of 2016. This trend was consistent with higher food prices.

Aside from the three Prairie provinces, all the other provinces and territories recorded increases of their wholesale food industry sales in 2016 over 2015.

Lower prices for farm products

The price for farm products trended downwards in 2016.

This had an impact on the Canadian farm product subsector as it was the lone subsector with lower in sales in 2016. The impact was felt across all the provinces and territories, with the three Prairie provinces being the most affected.

The evolution of wholesale sales in Canada

As 2017 marks the 150th anniversary of Confederation, we take a look back at an aspect of the history of wholesale sales in Canada.

In 1930, at the beginning of the Great Depression, 90,564 people were employed by a wholesale trade firm. This number had risen to 117,471 two years after the start of the Second World War in 1941. It continued to grow over the following decades. In 2015, the wholesale trade sector employed 782,981 people in Canada.

In 1930, the greatest share of the wholesale trade employment pie was held by Ontario, followed by Quebec and Manitoba. However, by 2015, Alberta replaced Manitoba in third place.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

For analytical information, or to enquire about the concepts, methods or data quality of this release, contact John Burton (613-862-4878; john.burton@canada.ca), Manufacturing and Wholesale Trade Division.