Climbing wholesale sales suggest improving economy in Alberta
A modest but convincing economic recovery has caused wholesale sales in Alberta to achieve a sixth consecutive quarter-over-quarter increase.
New data from Statistics Canada show Alberta’s wholesale sales increased 1.5 per cent, to $6.4 billion, for the first quarter of 2017.
The figures come from the latest Monthly Wholesale Trade Survey, which estimates monthly sales and inventory levels for Canadian wholesale merchants. The survey is a key indicator of the health of the Canadian economy and business market performance.
Nationally, wholesale sales increased 3.6 per cent from the fourth quarter of 2016 — the highest quarterly change since the second quarter of 2008. They also exceeded $60 billion for the first time.
All provinces saw an increase, except Manitoba, which recorded a 0.1 per cent decline.
Alberta’s gains — an 8.2 per cent increase from March 2016 — were led by the building material and supplies subsector and the motor vehicle and parts subsector.
Todd Hirsch, chief economist at ATB Financial, said the latest wholesale sales numbers are in step with other major economic indicators for retail trade, the labour
When all indicators are telling the same story, that gives me the confidence that Alberta’s economy is truly recovering.
market and housing starts.
“When all these indicators are kind of telling the same story, that gives me the confidence that Alberta’s economy is truly recovering,” he said.
Hirsch said the reconstruction in Fort McMurray following last year’s wildfire would have a noticeable, though small impact. A larger contributor, he said, is the upward trend in housing starts.
“Confidence levels are returning and that’s driving more of the home construction,” he said.
Farzana Choudhury, an analyst-economist with Statistics Canada, agreed that increased housing starts played a role, but she said it’s difficult to pinpoint.
The survey’s data also can’t tell the true impact of Fort McMurray reconstruction because it looks at sales on a provincial, not a regional, level.
Choudhury noted there is potentially room for Alberta’s wholesale sales figures to increase.
“The (wholesale sales) level in March is much lower than we had in October 2014,” she said.
Hirsch doesn’t believe the numbers have reached an inflection point yet.
“We still have ground to recover,” he said. “I think there’s more room to grow before we’re going to peak out.”