Canadian wholesale sales fell 0.6% to $41 billion in February, the sixth decline in seven months, according to Statistics Canada. Declining sales in the machinery and equipment trade group and the "other products" sector were major factors contributing to this decrease. In terms of the volume of sales, wholesale sales were flat.

Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in .

In February, four out of seven sectors, accounting for over two-thirds of total wholesale sales, posted declines. The machinery and electronic equipment sector declined 1.6%. Sales in the "other products" sector fell 4.0% to $5.3 billion, offsetting a 4.0% rise in January. Declines were also seen in the food and beverages sector (-1.0%) and the building materials sector (-0.9%).

The largest increase came in the automotive products sector, which rose 4.0% in February, following a 21.8% decline in January. Sales of motor vehicles increased 9.4%, offsetting some of the losses in January. Sales in motor vehicle parts and accessories fell 7.6% in February, its largest drop since April 2003.

By Province
Saskatchewan registered the largest decrease (-6.4%) in February, following a 10.7% increase in January. Lower sales in the "other products" and machinery and electronic equipment sectors were behind most of the decreases for the month.

Wholesale sales in Alberta fell 3.2%, the fifth decline in six months. Weakness was seen in several sectors, including machinery and electronic equipment, and building supplies.

Wholesale sales in Quebec rose 1.4%, while they declined 0.7% in Ontario .

Sales increased in three out of four Atlantic provinces, with Newfoundland and Labrador (+5.0%) and Nova Scotia (+4.0%) leading the way.

Inventories
Inventories edged up 0.1% in February. Among the 15 wholesale trade groups, 7 reported higher inventory levels, including alcohol and tobacco (+2.2%), office and professional equipment (+1.5%) and building supplies (+1.3%).

These increases were partially offset by declines in inventories of the lumber and millwork (-2.5%), computer and electronic equipment (-1.5%), and farm products (-3.4%) trade groups.

The slowdown in sales and the slight gain in inventories led to an increase in the inventory-to-sales ratio from 1.43 in January to 1.44 in February. This was the highest level since October 1995. The average inventory-to-sales ratio for 2008 was 1.27. The inventory-to-sales ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

Source: Statistics Canada