Wholesale sales weakened for the second time in three months, edging down 0.1% in September, Statistics Canada said today. Wholesalers sold $39.9 billion worth of goods and services.

In contrast to August, inventories rose 1.3% in September, their strongest monthly increase since January 2005.

Wholesale sales contracted in three of the seven sectors in September, which accounted for 58% of total sales. The decreases were registered in personal and household goods, machinery and electronic equipment, and the “other products” category sector, which includes chemicals and other farm supplies.

The sectors recording the largest increases were building materials and food products.

In constant dollars, wholesale sales rose 0.6% in September.

Sales advanced at a much slower rate in the quarter ending in September than in the two previous quarters. Sales grew only 0.3% in the third quarter compared with growth rates of 1.5% in the first and 2.3% in the second quarter.

The sharp decrease in sales of lumber and “other products” category partly explains the weak growth in the third quarter. Prior to the latest quarter, the wholesale trade sector had generally been performing well, with the trend rising since September 2003.

Sales down in the personal and household goods sector

Following a 1.5% increase in August, sales in the personal and household goods sector contracted 2.7% in September.

Following declines of 0.8% in July and 2.6% in August, sales in the machinery and electronic equipment sector fell a further 1.7% in September.

After two months of sluggish sales, sales of the building materials sector strongly rebounded in September, up 3.4%. All groups in this sector contributed to the increase.

Wholesale sales declines were concentrated in Eastern Canada in September.

Ontario posted the second largest drop in September, with the 1.6% decline mainly due to lower sales of household goods, “other products” category and machinery sectors.
Saskatchewan experienced the largest increase in September, advancing 6%, on the strength of sales in the “other products” category and the farm products group.

The largest decrease in September was registered in Prince Edward Island, where sales plunged 24%.