Wholesale sales in Canada increased for a third consecutive month in June, up 0.7 percent to C$56.4 billion (US$43.6 billion), according to Statistics Canada. Four of the seven subsectors, representing 68 percent of wholesale sales, recorded gains.

In volume terms, wholesale sales rose 0.6 percent from May to June.

In the second quarter, wholesale sales in current dollars grew 0.6 percent, while those in constant dollars advanced 1.1 percent.

The motor vehicle and parts subsector posted the largest increase in dollar terms in June, rising 3.1 percent to C$11.2 billion (US$8.7 billion), mainly on the strength of higher sales in the motor vehicle industry (+3.8 percent). For both the subsector and the industry, higher sales in the second quarter more than offset the decline in the first quarter. Imports of motor vehicles and parts, and manufacturing sales of motor vehicles also recorded gains in June.

The personal and household goods subsector posted the second largest increase in June, up 2 percent to C$8.4 billion (US$6.5 billion). This was the fifth consecutive monthly rise. While sales advanced in five of the subsector's six industries, the textile, clothing and footwear industry (+6.9 percent) and pharmaceuticals and pharmacy supplies industry (+1.4 percent) contributed the most to the gain.

Sales in the building material and supplies subsector increased for the second consecutive month in June, up 1.8 percent to C$7.6 billion (US$5.9 billion), with all of the subsector's industries reporting gains. The lumber, millwork, hardware and other building supplies industry (+2.6 percent) contributed the most to the rise, its sales reaching their highest level on record.

The machinery, equipment and supplies subsector rose 1.1 percent to C$11.1 billion (US$8.6 billion), a second consecutive increase. Higher sales were recorded in three of its four industries.

Following strong gains in the preceding two months, sales in the food, beverage and tobacco subsector declined 3.1 percent in June, as a result of lower sales in the food industry (-3.2 percent), which accounted for more than 90 percent of the subsector.

Sales in the miscellaneous subsector fell 0.5 percent in June on weaker sales in the agricultural supplies industry (-2.9 percent). Declining fertilizer prices in recent months have affected wholesalers in this industry.

The farm product subsector (-2 percent) also posted a decrease in sales. This was the fourth decline in five months for this subsector.

Wholesale sales were up in four provinces in June, representing 91 percent of total wholesale sales. In dollar terms, Ontario contributed the most to the gain.

Sales in Ontario increased for a second consecutive month, up 0.8 percent to C$28.9 billion (US$22.4 billion) in June. The motor vehicle and parts subsector and personal and household goods subsector contributed the most to the gain.

Following two consecutive monthly declines, sales in Alberta rose 3 percent to C$6.2 billion (US$4.8 billion). While most subsectors posted gains, the machinery, equipment and supplies subsector was the top contributor.

In British Columbia, sales grew 2 percent to C$5.7 billion (US$4.4 billion) in June, a third consecutive increase. Gains were widespread, led by the building material and supplies subsector.

In Quebec, sales rose for the third time in four months, up 0.2 percent to C$10.4 billion (US$8 billion). Higher sales in the motor vehicle and parts subsector and personal and household goods subsector led the gain.

Sales in Manitoba recorded the largest decline in dollar terms, down 5.6 percent to C$1.4 billion (US$1.1 billion). This was the lowest sales level for this province since December 2015. Lower sales in the miscellaneous subsector, led by the agricultural supplies industry, contributed the most to the decrease.

In Saskatchewan, wholesale sales fell 2.7 percent to C$1.9 billion (US$1.5 billion) in June. As in Manitoba, lower sales in the agricultural supplies industry contributed the most to the decline in this province.

Wholesale sales fell in each of the Atlantic provinces in June: Nova Scotia (-2.8 percent), New Brunswick (-3.7 percent), Newfoundland and Labrador (-2.2 percent) and Prince Edward Island (-5.3 percent). This was the first time sales were down in all four Atlantic provinces since November 2013. The decrease in each province was mainly attributable to lower sales in the food, beverage and tobacco subsector.

Inventories

Wholesale inventories edged down 0.1 percent to C$72 billion (US$55.7 billion) in June, their sixth decline in eight months. Five of seven subsectors, together representing 76 percent of total inventories, recorded decreases.

The machinery, equipment and supplies subsector (-1 percent) recorded the largest decrease in dollar terms, as inventories fell in most industries. In June, inventories in this subsector were at their lowest level since December 2014.

Inventories in the personal and household goods subsector fell 0.8 percent in June, partially offsetting the gain in May.

Inventories in both the miscellaneous subsector and building material and supplies subsector were down 0.1 percent. In the miscellaneous subsector, inventories declined for a fourth consecutive month. In the building material and supplies subsector, inventories decreased for the fifth time in six months and reached their lowest level since June 2014.

The motor vehicle and parts subsector reported the largest gain in dollar terms in June, with inventories up 1.5 percent to their highest level on record.

Inventories in the food, beverage and tobacco subsector increased 2 percent.

The inventory-to-sales ratio declined from 1.29 in May to 1.28 in June. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

Fort McMurray wildfire and evacuation

For a second consecutive month, the Monthly Wholesale Trade Survey added three supplementary questions to assess the impact of the Fort McMurray wildfire, which started in early May 2016.

For the June reference month, about 1,250 companies (approximately 1,500 in May) responded to the supplementary questions. Of these companies, 147 wholesalers (about 12 percent) indicated that they had been affected by the wildfire, down from 212 wholesalers (about 14 percent) in May. Among the companies that reported being affected, about 35 percent were able to quantify the impact in June, compared with about 50 percent in May.

While the effects of the wildfire were widespread across most wholesale subsectors, responses to the supplementary questions indicated that the machinery, equipment and supplies subsector had the largest share of companies reporting an impact in June, the same as in May.

In both May and June, responses to the supplementary questions also indicated that wholesale establishments in most provinces had been affected, led by those in Alberta, Ontario and British Columbia. Although the responses pointed toward a negative contribution, the overall impact of the wildfire and evacuation on wholesale sales was relatively small.