Today's Report (11/15/2021)

Wholesale Sales

Wholesale sales grew 1.0% in September to $71.3 billion, the fifth increase in the past seven months. Sales of agricultural supplies (part of the miscellaneous subsector) and machinery, equipment, and supplies generated the gain in September. Lower sales in the motor vehicle and motor vehicle parts and accessories subsector and the building material and supplies subsector partially offset the increase. Overall sales rose in four of seven subsectors, representing nearly 70% of the sector.

Notwithstanding the higher sales in both August and September, wholesale sales in the third quarter fell 1.6% to$212.0 billion. This was the first quarterly decline since the second quarter of 2020. The decline was entire as a result of a drop in sales of lumber, millwork, hardware, and other building supplies which was generated by a steep decline in the prices for softwood lumber. Excluding the decrease in that industry, wholesale sales rose 1.0%.

The strongest increase in the third quarter came from the miscellaneous subsector which rose 5.7%. All of the industries in the subsector posted gains in the third quarter, led by agricultural supplies and recyclable materials.

Manufacturing Sales 

Manufacturing sales declined 3.0% to $58.5 billion in September, the lowest level since May 2021. Sales decreased in 12 of 21 industries, with most of the decline attributable to lower sales of motor vehicles due to the shortage of semiconductors. The decrease was partially offset by higher sales in the petroleum and coal industry.

What Is It?

Reports the change in the value of sales at the wholesale level across Canada.

What Are The Fundamental Effects?

A company who’s stockroom is filled with unsold goods can quickly find itself in a financial squeeze, especially if the economy starts to weaken.

Retailers with bloated inventories and sleepy sales will cut back or cancel their orders to wholesalers. As a result, wholesalers, fearful that their own stockrooms will start to swell with unwanted products, start to postpone orders to factories.

How Does It Affect The Markets?

CURRENCY - Currency traders generally look at the CAD more favorably if both sales and inventories are rising at the wholesale level.

STOCKS - Generally muted reaction.

BONDS - Faster than expected growth in wholesale sales can upset bond traders because it adds to GDP growth and can put upward pressure on interest rates. A fall in wholesale sales subtracts from the economic output, which is positive for bonds.

Canadian Manufacturing Sales

A monthly survey of manufacturing in Canada measuring the sales in different manufacturing sectors.