Canada Wholesale Sales Fall From Record in Widespread DropGreg Quinn
Canadian wholesale sales fell in June from a record the previous month with declines in every major category, led by farming and building supplies, adding to signs of a mid-year slowdown in the world’s 11th largest economy.
Wholesale sales dropped 2.8 percent to C$48.8 billion ($47.1 billion), the fastest since January 2009, Statistics Canada said today in Ottawa. The decline exceeded the most pessimistic of 13 estimates in a Bloomberg survey that had a median estimate for a 0.5 percent fall.
Economic growth will be “choppy” in the next few months, Bank of Canada Governor Stephen Poloz said in a July forecast, with the expansion slowing to a 1 second-quarter percent pace before accelerating to 3.8 percent in the July-to-September period. The bank said output has been disrupted by flooding in Alberta and a Quebec construction strike.
“We are getting weak numbers in June pointing to a fairly sizable decline in gross domestic product” of 0.4 percentage point, said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. Canada will probably also report a decline in June retail sales on Aug. 22 before the monthly GDP figure on Aug. 30, Ferley said.
The Canadian dollar depreciated 0.5 percent to C$1.0395 per U.S. dollar at 9:51 a.m. It touched C$1.0401, the weakest since Aug. 8. One dollar buys 96.20 U.S. cents.
All seven major categories tracked by the agency fell in June. Building material and supplies sales slipped 3 percent to C$6.69 billion, and motor vehicles and parts dropped 2.2 percent to C$8.20 billion. Agricultural supplies plunged 22.6 percent to C$2.02 billion, offsetting a similar increase the month before, to lead an 8 percent drop by miscellaneous wholesalers.
The declines were also spread across seven of Canada’s 10 provinces, with the manufacturing hub of Ontario accounting for almost 70 percent of the national drop, Statistics Canada said. Sales fell 1.5 percent in Alberta and 2.6 percent in Quebec.
The volume of wholesale sales, which removes the impact of price changes, dropped 2.9 percent.
Inventories increased 0.8 percent to C$62.4 billion in June, boosting the ratio of inventories to sales to 1.28, the highest since August 2009, from 1.23.
Wholesale sales were 1.4 percent lower in June than the same month a year earlier.