Wholesale sales in Canada rose for the fourth straight month in July, largely in line with market expectations. However, the Organization for Economic Co-operation and Development (OECD) has slashed the economic growth forecast of the country, owing to ongoing global headwinds that are likely to pose threats to the Canadian economy.
Canadian wholesale sales rose 0.3 percent in July following a 0.7 percent gain in the previous month, data released by Statistics Canada showed Wednesday. Also, sales rose 3.3 percent on an annual basis, in line with market consensus.
Moreover, in volume terms, sales were unchanged on the month to give a 2.5 percent, with sales increasing in five of the seven sub-sectors representing 72 percent of sales. There was a strong 2.0 percent monthly gain in sales for motor vehicles and parts to give an 8.7 percent annual increase and excluding this category there was a 0.1 percent decline to give a 2.1 percent annual increase.
There was also a solid monthly gain in food and drink of 1.2 percent, rising 4.9 percent on an annual basis. Elsewhere, machinery sales increased for the first time since January, while sales of personal and household goods declined 2.0 percent on the month, but still recorded a 4.8 percent annual gain. Building materials recorded a decline on both a monthly and annual basis.
Inventories remained unchanged for July to register a 0.2 percent annual decline with the inventory-to-sales ratio also unchanged at 1.27. Meanwhile, in an interim global economic outlook issued Wednesday, the OECD said that commercial and residential prices in the United States, the United Kingdom and Canada have snapped back to levels preceding the 2008 fiscal crisis and its credit crunch triggered by home loan defaults in the US subprime mortgage market.
The OECD sees 2017 growth in Canada at 2.1 per cent, down from its earlier estimate of 2.2 per cent. Economists, however, expect growth to bounce back in the third quarter as heavy oil production returns to normal levels.
“While weak demand is surely playing a role in the trade slowdown, a lack of political support for trade policies whose benefits could be widely shared is of deep concern,” said Catherine Mann, Chief Economist, OECD.