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As the Covid-19 pandemic emerged in March, wholesale trade declined, Statistics Canada reports — and it’s expected to get worse in the months ahead.

In dollar terms, wholesale sales dropped by 2.2% to $63.9 billion in March, StatsCan said, following three consecutive months of gains.

StatsCan noted that 75.9% of wholesalers reported that their business was impacted by the Covid-19 pandemic.

“The personal and household goods sub-sector reported the highest proportion of affected businesses,” it said.

The mandatory closure of non-essential businesses resulted in lower sales volumes in many sectors, whereas certain segments, such as the pharmaceuticals and pharmacy supplies industry, saw positive effects due to abnormal buying patterns, StatsCan said.

Weakness in the auto sector (both vehicles and parts) was the biggest source of the decline in wholesale sales for March, the national statistical agency said.

The impacts are expected to become even more widespread in future data releases, as the effects of lockdowns deepen their impact on businesses.

“As the largest component of Canada’s services sector, wholesale trade impacts the whole economy while acting as the ‘invisible’ intermediary,” StatsCan noted.

Looking ahead to April, StatsCan said some industries, like motor vehicles, were “almost completely shut down” as manufacturing facilities were closed and dealerships relied on online sales.

“Construction activity in most of Canada also ground to a halt,” it said. “Sales of construction equipment and supplies are starting to suffer.”

StatsCan also said that the food industry “suffered from a variety of negative events” in April, including the shutdown of meat processing plants and the closure of restaurants, “so lower sales of food wholesaling to restaurants can be expected compared with March.”

At the same time, grocery store sales likely rose due to higher consumer demand, and food prices rose amid household stockpiling, StatsCan said.