Canadian January Wholesale Sales Rose 3.3%, Motor Vehicle Sales Surge

Canadian wholesales sales rose 3.3% for January which was substantially above consensus expectations of a 0.3% monthly gain and the strongest monthly advance since November 2009.

Although there was a downward revision to December’s data to 0.3% from 0.7% originally reported, there was a 4.7% annual increase.

Sales increased in four of the seven sub-sectors while in volume terms sales rose 3.4% for a 4.2% annual increase.

There was a notably strong increase in motor vehicle and parts sales of 17.1% on the month to give an 8.1% annual increase.

Excluding motor vehicles sales, there was a 0.3% increase for January to give a 3.9% monthly advance.

Food sales rose 0.2% on the month with a 4.2% annual gain with sales of personal and household goods rose 3.0% on the month to give an 8.4% annual increase.

Building materials and machinery sales both recorded a slight decline in sales on the month.

Wholesale inventories fell 0.3% in January, the first decline in six months, with a sharp decline in motor vehicle inventories. The inventory/sales ratio declined to 1.25 from 1.29 previously.

The sharp increase in motor-vehicle sales will ease fears surrounding excess inventories and should help underpin confidence in consumer spending trends. The overall data impact is likely to be limited, especially with subdued overall growth outside the motor sector.

The Canadian dollar was unable to derive any support from the data with USD/CAD advancing to 1.3365 from 1.3355 as oil prices came under further selling pressure.

Tim is a contributing author to He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.