OTTAWA: Canadian wholesale sales declined for a fourth consecutive month in October, missing market expectations and adding to questions about the pace of Canada’s economic recovery.
October wholesale trade fell 0.6% from September to a seasonally adjusted 54.74 billion Canadian dollars ($39.24 billion), Statistics Canada said Friday. Expectations were for a 0.1% increase, according to economists at Royal Bank of Canada.
Wholesale sales also fell in volume terms, by 0.6%, and inventories climbed 0.5% to C$73.16 billion.
The report comes amid worries that Canada’s economic recovery may be slowing. Canada’s economy shrank in the first half of 2015, as a sharp drop in oil prices drove down business investment, before returning to growth in the third quarter.
October’s wholesale trade data “support our view that Q4 will be slower than many expect,” CIBC World Markets economist Nick Exarhos said in a note. “Manufacturing shipments earlier this week also disappointed, meaning that aside from the lift provided by a bounce back in crude production, October will have little economic momentum.”
Statistics Canada also released inflation data for November on Friday, indicating that the consumer-price index rose 1.4% from a year earlier, an increase some economists attribute to a diminishing drag from lower energy prices. Expectations were for a 1.5% increase in November, according to economists at Royal Bank of Canada.
The annual core inflation rate, which excludes volatile components such as some food and energy prices, rose 2% in November compared with a year earlier. Market expectations were for a 2.3% rise.
While wholesale data often get less attention than other economic indicators, wholesalers account for the biggest portion of the country’s services sector—which in turn makes up around two-thirds of overall economic output. Wholesalers generally act as intermediaries in distributing merchandise and tend to sell goods in large amounts to retailers, businesses and institutional clients.
Lower sales in the food, beverage and tobacco sector posed the biggest drag on wholesale trade in October. Sales in the sector declined 3.0% in the month to C$10.54 billion. Motor vehicle and parts sales fell for a fourth consecutive month, down 2.1% to C$9.46 billion.
Partially offsetting the declines was a 1.4% advance in the machinery, equipment and supplies sector, which Statistics Canada said reached its highest level since October 2014.
The inventory-to-sales ratio, or the time in months required to eliminate stockpiles if sales were to remain at current levels, was 1.34:1, up from 1.32:1 in September and the highest level since June 2009.
Chinese consortium to expand investment in Pakistan’s capital market infrastructure
ISLAMABAD: Chinese investors have reaffirmed their long-term commitment to Pakistan’s capital markets following the resolution of key regulatory matters by...
