March 2008

Wholesalers shook off a disappointing December to start the New Year strong, helped in part by a price driven surge in the sale of agricultural chemicals, according to Statistics Canada.

Sales by Canadian wholesalers rose a healthy 2.6% in January to $44.1 billion, effectively offsetting the 2.6% drop recorded in December.

In January, six of the seven wholesale sectors reported higher sales, led by very strong growth in the other products” sector (+11.4%). The growth in this sector was driven by higher sales of agricultural chemicals, which also benefited from sharply higher prices during the month.

Wholesalers of machinery and electronic equipment (+2.2%), food, beverage and tobacco products (+2.1%) and building materials (+1.7%) were …

Source: Statistics Canada, www.statcan.ca
 
Canadian manufacturers started 2008 with a modest but positive lift in sales. Manufacturing sales increased by 1.3% in January to $49.3 billion, as the sector struggled to spring back from the three-year low posted in December (-3.7%).
 
Notwithstanding January’s increase, manufacturing sales, which have been trending downward for much of the last year, remained 7.1% below the recent peak reached in March 2007 ($53.1 billion) and with the exception of the previous month, January 2008 marked the lowest sales level since March of 2005.

Much of the weakness continued to come from the motor vehicle and parts …

The American Trucking Association announced it is projecting record-high diesel fuel prices in 2008. The association said the trucking industry will spend $135 billion on fuel, based on current fuel price forecasts. This is $22 billion more than in 2007.
 
Historically, according to the ATA, fuel represented the second-highest operating expense for motor carriers, accounting for as much as 25% of total operating costs. For some carriers, however, fuel is starting to surpass labor as the largest expense.
 
The cost to fill the fuel tanks on a typical tractor trailer has increased 116%, or $615, in just five years, according to the ATA. Because trucks haul 70% of all freight tonnage, the ATA says, rising fuel costs have the potential to increase …

According to a recent report by Statistics Canada (www.statcan.ca), there are several indications that the Canadian economy quickly shrugged off its drop in December and began growing again in the New Year. Housing starts and auto sales posted strong gains. The stock market in February rebounded from its dip in January, reflecting one of the largest jumps in monthly commodity prices during the current boom that began six years ago. Most importantly, firms expanded payrolls in both January and February, consistent with a pickup in investment plans for 2008.

Firms plan to boost nominal business investment about 6% in 2008, according to the annual survey of investment intentions. The increase bettered last year’s hike, and was …