Wholesale Sales in Canada Increase by 2.4% in January 2023

• Wholesale sales in Canada increased by 2.4% in January 2023, reaching $84.2 billion, with the machinery, equipment, and supplies subsector and the food, beverage, and tobacco subsector leading the increase.
• British Columbia led the provincial gains, with sales increasing by 11%, while Alberta also saw gains in sales.
• Wholesale inventories continued to rise in January, indicating potential supply chain challenges.

Overview:

Wholesale sales in Canada increased by 2.4% in January 2023, reaching $84.2 billion. Six out of seven subsectors experienced sales growth, accounting for 84% of wholesale sales. The machinery, equipment, and supplies subsector and the food, beverage, and tobacco subsector led the increase in January.

Subsector Analysis:

Following a sharp decline in December, sales of machinery, equipment, and supplies rose 3.2% to $17.7 billion in January. The construction, forestry, mining, and industrial machinery, equipment, and supplies industry group led the overall subsector growth with an increase of 10.6% to $6.1 billion. Higher sales of machinery, equipment, and supplies align with the increased import activity of these commodities in January.

Food, Beverage, and Tobacco Products Subsector:

The food, beverage, and tobacco products subsector reported an increase in sales (+3.6% to $15.7 billion) for the second consecutive month in January. The food industry group (+4.2% to $14.0 billion) contributed the most to the monthly increase.

Motor Vehicle and Motor Vehicle Parts and Accessories:

The only declining subsector in January was a motor vehicle and motor vehicle parts and accessories, down 2.4% to $13.3 billion. The decrease in sales in January was due to a ramp-up of sales in the last quarter of 2022 in addition to companies gearing up production for more electric vehicle sales.

Provincial Analysis:

British Columbia Leads Provincial Gains:

Sales increased in eight provinces in January, accounting for 82% of national sales. In British Columbia, sales rebounded in January, increasing 11.0% to $8.0 billion, after decreasing 9.0% in December. Sales of machinery, equipment, and supplies grew the most (+24.9% to $1.7 billion) and accounted for 41% of the provincial increase.

Alberta:

Sales in Alberta increased 6.2% to $9.6 billion in January after two consecutive monthly declines. The machinery, equipment, and supplies subsector led the gains with an increase of 6.9% to $3.1 billion.

Inventory Analysis:

Inventories in January Continue to Increase:

Wholesale inventories rose, up 1.5% to $128.6 billion in January after edging up by 0.7% in December. Higher inventories were reported in three of the seven subsectors in January. The largest increases came from the personal and household goods subsector and the building material and supplies subsector. The miscellaneous subsector and the motor vehicle and motor vehicle parts and accessories subsector reported declines in January.

Conclusion:

In conclusion, the Canadian wholesale sector continued to perform well in January 2023, with a 2.4% increase in sales. This growth was driven by the machinery, equipment, and supplies subsector and the food, beverage, and tobacco subsector. British Columbia led the provincial gains, with sales increasing by 11%, while Alberta also saw gains in sales. However, the motor vehicle and motor vehicle parts and accessories subsector reported a decline in sales due to increased production of electric vehicles. Despite the increase in sales, wholesale inventories continued to rise in January, indicating potential supply chain challenges. The Canadian Survey of Wholesale Trade for the first quarter of 2023 will provide a more comprehensive view of the wholesale sector’s performance and its impact on the Canadian economy.

Source: https://www.statcan.gc.ca