Canadian wholesale activity posted a modest rise in March, growing by 0.6% to $42.7 billion, but that was not enough to prevent a second straight quarterly fall in sales, Statistics Canada said today.

The March increase was a small turnaround from the 2.1% decline seen in February.

During March, wholesale sales grew thanks to higher deliveries of building supplies, machinery and electronic equipment.

Building supply sales rose by 3.4% in March, following a February that was hurt by winter weather conditions in Central Canada. The March growth in building supply sales accounted for around half of the overall rise in wholesale sales.

StatsCan said most of the remaining growth in March came from a 2.6% increase in the machinery and equipment trade group, which grew for a third consecutive month.

On the down side, there was a second straight monthly decline for consumer-related trade groups, such as household and personal products, pharmaceuticals and apparel.

For the January-March quarter, wholesale sales fell 0.8%, following a 0.3% decline in the fourth quarter of 2007.

Sales during the first quarter of this year were affected by a large drop in the motor vehicles trade group, which had its fourth consecutive quarterly decline, as well as ongoing weakness in the lumber sector.