Wholesale trade, July 2023

Released: 2023-09-14

Wholesale sales (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) grew 0.2% to $81.3 billion in July. Despite the majority of subsectors reporting a monthly decline, it was the increase of sales in the motor vehicle and motor vehicle parts and accessories subsector and the building material and supplies subsector that drove the overall sector to an increase. On an annual basis, wholesale sales (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) were up 1.1%.

Petroleum products as well as oilseed and grain data continue to be available in data tables, but will be excluded from monthly analysis until historical data are available for monthly and annual analysis.

The port strike in British Columbia that disrupted supply chains primarily on the west coast of Canada had a minor impact on the wholesale sector in July. At the national level, the port strike impacted less than 5% of wholesale businesses.

Constant dollar sales (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) increased 0.2% in July.

Chart 1 
Wholesale sales (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) increase in July

Higher sales in the motor vehicle and motor vehicle parts and accessories subsector drive the wholesale sales growth in July

Sales in the motor vehicle and motor vehicle parts and accessories subsector grew by 3.9% to $14.1 billion in July—the third monthly increase in the subsector since the start of 2023. A monthly increase was reported in July by two of the three industry groups, however it was mainly sales in the motor vehicle industry group (+4.2% to $11.4 billion) that influenced the subsector movement. Exports of motor vehicles and motor vehicle parts (+2.1%) also reported a monthly increase in July.

The building material and supplies subsector reported growth (+2.7% to $12.0 billion) in July, marking the first subsector increase since March 2023. An increase in sales was reported by two of the three industry groups, however it was the lumber, millwork, hardware and other building supplies industry group (+4.6% to $5.9 billion) that most influenced the subsector movement. Higher prices of lumber, due to multiple factors such as the wildfires in the Pacific Northwest and the strike by port workers in British Columbia, contributed to the higher level of sales in July.

Growth in the sector was partially offset by a decline in the machinery, equipment and supplies subsector (-2.2% to $17.4 billion). The majority of the industry groups reported monthly declines, with the downward movement led by the decrease in sales from the farm, lawn and garden machinery and equipment industry group (-13.2% to $2.2 billion) and the computer and communications equipment and supplies industry group (-4.7% to $4.9 billion).

Sales from Alberta lead provincial gains

Growth of provincial sales was reported in half of the provinces in July, led by Alberta and followed by Quebec.

After leading the provincial declines in June, wholesale sales in Alberta bounced back, increasing by 5.2% to $9.1 billion in July. Growth from Alberta was reported in all seven subsectors, with the largest growth coming from the building material and supplies subsector (+10.7% to $1.5 billion), followed by the miscellaneous subsector (+13.7% to $1.2 billion).

Wholesale sales in Quebec grew 0.5% to $14.9 billion, led by the building material and supplies subsector (+5.3% to $2.4 billion).

Partially offsetting the overall growth of provincial sales was a drop in sales from Ontario. Wholesale sales in the province fell 0.4% to $42.4 billion in July, led by the machinery, equipment and supplies subsector (-4.6% to $8.6 billion).

Inventories grow in July

Wholesale inventories (excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain) rose 0.4% to $128.4 billion in July.

An increase of inventories was reported in four of the seven subsectors in July, led by the machinery, equipment and supplies subsector (+1.5% to $37.8 billion), followed by the motor vehicle and motor vehicle parts and accessories subsector (+1.6% to $16.2 billion).

The inventory-to-sales ratio decreased from 1.59 in June to 1.58 in July. This ratio is a measure of the time (in months) required to exhaust inventories if sales were to remain at their current levels.

Early estimates from the 2022 Annual Wholesale Trade Survey

Preliminary estimates for the 2022 Annual Wholesale Trade Survey are currently being processed and analyzed prior to their release. This portion of the article includes an early indication of some key figures, including petroleum products which are excluded from the monthly analysis. Final results will be released on December 11, 2023. Since these estimates were calculated based on a lower weighted response rate, they may be subject to a higher revision rate than the regular annual release.

The total operating revenue of Canadian wholesalers increased 26.5% in 2022 to $1.6 trillion. The cost of goods sold was up 30.3% to $1.4 trillion. Therefore, gross margins for wholesalers declined from 16.8% in 2021 to 14.3% for 2022. Growth in total operating revenue and cost of goods sold was driven by the petroleum and petroleum products subsector, and the machinery, equipment and supplies subsector. Together, these two subsectors accounted for 46.1% of the revenue in the wholesale industry, which translates to 70.1% of the growth in this sector.

Petroleum wholesalers, the largest contributor to wholesale revenues in Canada, saw their revenues increase 65.4% to $544.4 billion in 2022. The cost of goods sold by the petroleum subsector rose 70.0% in 2022 to $533.8 billion. During that time, the Raw Materials Price Index for energy and petroleum products rose by 53.3%, following a 42.8% increase in 2021. Gross margins for petroleum wholesalers decreased to 2.0% in 2022 from 4.3% in 2021 as the cost of goods sold grew at a higher rate than revenues.

The machinery, equipment and supplies wholesale subsector reported total operating revenue of $213.2 billion in 2022. This represented an increase of 13.6%, with much of this growth attributed to the construction, forestry, mining and industrial machinery, equipment and supplies industry group. Growth recorded by the cost of goods sold reached 11.3%, while gross margins remained relatively the same, edging up from 26.5% in 2021 to 26.6% in 2022.

Products

The product "Monthly Wholesale Trade Survey: Interactive Tool" (Catalogue number71-607-X) is available online. This product is based on the data published in the tables of the Monthly Wholesale Trade Survey: 20-10-0074-01, 20-10-0076-01 and 20-10-0003-01.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).