Building Materials and Supplies Lead Canadian Wholesale Sector Sales Higher in January

Statistics Canada (StatsCan) reported today (3-16-22) that sales in the wholesale sector rose 4.2% in January to $79.8 billion (CAD). The increase in January marks the sixths consecutive month of growth in the sector and the is the largest since June 2020. Five of the seven subsectors posted gains, and those five represent 72% of the total wholesale sales reporting sector.

Growth for the month was led by building material and supplies, which rose 14.0% to $14.1 billion—the sixth consecutive monthly increase for the subsector. The strong increase for the month reflects higher sales to export markets, as exports of lumber and sawmill products jumped 16.3% and exports of plastic and foam building and construction materials rose 20.1%.

Notably, the price of lumber and other wood products—as measured by the Industrial Product Price Index—rose 11.8% in January, indicating that the increased level of nominal sales in the building material and supplies wholesale subsector had both a price and volume component.

Personal and household goods sales rose for the third consecutive month, up 10.6% to $12.2 billion. Sales topped $11 billion for the first time in December 2021, and promptly grew to more than $12 billion in January. More than 80% of the gains in January came from the pharmaceuticals and pharmacy supplies subsector, particularly companies whose products are being used directly in the fight against COVID-19.

Sales in the machinery, equipment, and supplies subsector rose 6.6% to $16.8 billion—the fifth consecutive monthly increase. Three of the four industries in the subsector reported higher sales in January, led by the construction, forestry, mining and industrial machinery, equipment, and supplies industry which posted a 15.2% gain. The increase in the subsector was driven by domestic demand, given that exports of industrial machinery equipment and parts fell 0.8% in January.

The largest decline in the sector came in the motor vehicle and motor vehicle parts and accessories subsector, which fell -5.8% to $11.1 billion in January.