Statscan - This was following a 2.6% increase in July. Weaker sales in the automotive products, machinery and electronic equipment, and building materials sectors were the major factors contributing to the decline.

In volume terms, wholesale sales were down 0.8% in August.

Although sales in all seven wholesale sectors fell in August, losses in three sectors accounted for close to 90% of the total decline.

The largest decrease came in the automotive products sector, which fell 3.3% in August. Following a 17.8% increase in July, sales of motor vehicles fell 4.7%, the first decline in seven months. This drop coincides with the latest international merchandise trade data, which shows a decline in both Canadian imports and exports of passenger autos.

The machinery and electronic equipment sector declined 2.4% in August, with the machinery and equipment trade group (-5.8%) accounting for all of the loss. This trade group, which accounts for close to half of the sector, continued its downward trend that started in December 2008.

Sales in the building materials sector fell 1.8% in August, following a 3.0% increase in July. Declines were seen in both the metal products (-4.3%) and building supplies (-1.7%) trade groups.

Wholesale sales down in seven provinces

After posting increases in July, wholesalers in Ontario and Quebec both reported lower sales in August. Ontario, which accounts for about half of Canada's total wholesale sales, saw a decrease of 2.2%. Lower sales in the automotive products sector was the major factor contributing to this decrease. In Quebec, sales fell 1.0%, with the personal and household goods and machinery and electronic equipment sectors accounting for most of the decline.

Wholesale sales fell in Alberta (-1.4%) and British Columbia (-1.6%), primarily as a result of lower sales in the machinery and electronic equipment sector.

Provincially, Saskatchewan registered the largest increase (+6.8%) in August, following a 4.8% decline in July. Higher sales in agricultural chemical and other farm supplies was the major factor contributing to the increase in August.

Inventories continue to fall

Wholesale inventories fell for the sixth month in a row, down 1.1% to $55.5 billion in August.

Overall, 11 of the 15 wholesale trade groups reported lower inventory levels, with the largest decline in dollar terms in machinery and equipment (-1.0%). Higher inventories were seen in food products (+1.1%) and computer and other electronic equipment (+1.2%).

The inventory-to-sales ratio remained unchanged at 1.35 in August.

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.

Note to readers

Wholesale sales in volume terms are calculated by deflating current dollar values using import and industry product price indexes. Since many of the goods sold by wholesalers are imported, fluctuations in the value of the Canadian dollar can have an important influence on the prices of goods bought and sold by wholesalers.

The wholesale sales series in chained (2002) dollars is a chained Fisher volume index with 2002 as the reference year.