Wholesale sales post record plunge

All seven subsectors hit hard by pandemic, Statistics Canada says

OTTAWA—Wholesale sales in Canada fell by a record 21.6 per cent to $49.8 billion in April, led by a plunge in the motor vehicle and motor vehicle parts and accessories subsector due to the pandemic.

Statistics Canada said Thursday that wholesale sales fell to their lowest level since July 2013 as all seven subsectors recorded lower sales for the first time since November 2008.

Economists on average had expected a drop of 12.6 per cent, according to financial markets data firm Refinitiv.

“The more pronounced drop in these numbers, combined with the earlier released manufacturing and employment data for April, suggest that there’s some downside risk to Statistics Canada’s -11 per cent flash estimate of April GDP,” CIBC senior economist Royce Mendes wrote in a note. Wholesale sales volumes dropped a record 21.5 per cent to their lowest level since September 2009.

April was the first full month to see physical distancing measures put in place by public health authorities across the country.

Statistics Canada said 79.5 per cent of wholesalers reported that COVID-19 had an impact on their business.

It added that 90.1 per cent of wholesalers in the personal and household goods subsector reported that their businesses were affected by the pandemic.

The motor vehicle and motor vehicle parts and accessories subsector fell by a whopping 64.7 per cent in April following a 21.7 per cent drop in March. Excluding the subsector, wholesale sales were down 14.2 per cent.

The personal and household goods subsector fell 21.5 per cent.

Regionally, Statistics Canada said nine provinces saw wholesale sales move lower, while Saskatchewan rose 1.6 per cent.

Sales in Ontario fell 30.2 per cent in April, while Quebec dropped 17.6 per cent.

Statistics Canada will report retail sales figures for April on Friday.

“The more pronounced drop in these numbers … suggest that there’s some downside risk to Statistics Canada’s -11 per cent flash estimate of April GDP.”

ROYCE MENDES CIBC SENIOR ECONOMIST