Canadian wholesale trade posted a nominal increase in October, building on recent sector strength due to rising vehicle and parts sales, though underlying data points to weaker sales volumes and a sluggish economic start to the fourth quarter.
Key October Data (Month-over-Month)
- Nominal Sales: Increased 0.1% to C$86.03 billion (US$62.47 billion).
- Volume-Adjusted Sales: Decreased 0.7%, indicating a decline in the actual quantity of goods sold.
- Context: The nominal result outperformed Statistics Canada's advance estimate for a 0.1% dip and followed a stronger 0.6% rise in September.
Sector Breakdown
Four of the seven wholesale sectors saw higher sales, accounting for just under half of total activity.
- Top Performer: The motor vehicles and parts subsector rose 2.3% to C$14.70 billion, driven by wholesale sales of imported passenger vehicles, buses, and transport trucks.
- Stripping Out Autos: Excluding the autos segment, overall wholesale sales for the month declined 0.4%.
- Other Notable Moves: Sales of farm products rose strongly, while activity for miscellaneous wholesalers and sales of agricultural products, minerals, ore, and precious metals dropped.
Broader Economic Context
- Inventories: The value of wholesale inventories was steady at C$135.39 billion for the month, though up 7.0% year-over-year.
- Transitional Headline Figure: Including sales by petroleum, oilseed, and grain merchants—a new headline measure Statistics Canada is transitioning to—wholesale sales for October were 0.2% higher at C$117.79 billion. Inventories on this basis increased 0.5%.
- Q4 Economic Sluggishness: The data aligns with a weak start to the fourth quarter. Industry-level GDP is estimated to have contracted 0.3% in October, which would mark the sharpest monthly decline since December 2022.
- Bank of Canada Outlook: The central bank, which held its policy rate steady this week after two consecutive cuts, continues to project weak economic growth for the final quarter of 2025 and a soft 1.1% annualized expansion in 2026.