Canada’s July wholesale trade:
Wholesale sales MoM: +0.3% vs -0.5% expected. Prior +2.8%Wholesale sales YoY: +7.9%Wholesale sales volumes MoM: -0.6%Wholesale inventories: Essentially unchanged at C$140.6 billionInventory-to-sales ratio: 1.51 vs 1.52 in June
Canadian wholesale sales increased 0.3% to C$93.1 billion in July, according to Statistics Canada. That was stronger than the 0.5% decline expected, although growth slowed sharply from June’s 2.8% increase.
Sales increased in three of seven subsectors. Building materials and supplies led the gains, rising 3.5%, helped by a 10.3% increase at metal service centres. Food, beverage and tobacco sales increased 1.7%.
The details were more mixed than the headline. When adjusted for price changes, wholesale sales volumes declined 0.6%. That suggests higher prices—including steel prices—accounted for at least part of the increase in the dollar value of sales.
Quick analysis: The headline was stronger than expected and may provide modest support for the Canadian dollar, which would normally pressure USDCAD lower. However, the decline in sales volumes softens the result and suggests underlying demand was not as strong as the headline implies. On balance, this report alone is unlikely to materially change expectations for the Bank of Canada.
What this report measures: Wholesale sales track the value of goods sold by Canadian wholesalers to retailers, businesses and other customers. Traders monitor the monthly report for clues about business demand, inventories and future economic activity. The volume measure adjusts for price changes, making it useful for determining whether businesses sold more goods or simply collected more because prices increased.
This article was written by Greg Michalowski at investinglive.com.