Canada

Thursday, May 23, 2019 - 08:44

MNI DATA IMPACT: Canada March Wholesale Sales +1.4%, 2-Yr High


By Greg Quinn

OTTAWA (MNI) - Canadian wholesale sales rose 1.4% to C$64.1 billion in March, a fourth straight increase and the fastest pace in two years, with gains across most sectors led by building supplies.

The gain reported by Statistics Canada Thursday was faster than the estimates of 0.8% from Bank of Montreal and 1.1% from CIBC. However, the solid March gain followed downward revisions in both January and February. Statistics Canada lowered its estimate for February sales to a 0.2% gain from 0.3%, and for January to 0.3% from 0.4%.

Here are some other key takeaways from the data released Thursday:

- Six of seven major industries reported gains in March, including a 4.5% rise in building materials and supplies that followed a 5.0% decline in February. Machinery and equipment sales rose 2.9%. The gains were also widespread across regions, with wholesale sales up in eight of Canada's 10 provinces

- Automobiles and parts was the lone weak spot with a 2.0% decline. Excluding autos and parts, wholesale sales rose 2.2% on the month, also the best showing in two years.

- The strong report follows gains in retail sales and job creation to suggest the economy started emerging from a weak patch that began around the end of last year. The Bank of Canada has an interest-rate meeting next week and policy makers have said accommodative policy is needed, and that growth should pick up after the first quarter of this year.

- Wholesale inventories rose 0.4% in March, matching the readings for the prior two months. Combined with the sale gain, the inventories-to-sales ratio declined to 1.40 in March from 1.42 in February.

- Incorporating the March sales gain and the revisions to the previous two months, wholesale sales rose 0.7% in the first quarter, faster than a 0.1% gain in the previous quarter.

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

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