The coronavirus pandemic caused many businesses across Canada to shut their doors, while consumers were instructed to stay at home and practice social distancing as means of reducing the spread of the virus. As a result, recent Statistics Canada data found that Canadian wholesale trade fell to the lowest level since 2013, with all subsectors suffering some sort of pandemic drawback.
Previously, Reuters analysts forecasted wholesale trade to decrease by 12.6%, but recent data is showing a much more grim picture. Wholesale trade in April fell to $49.8 billion, which translates to a reduction of 21.6%. The motor vehicle and parts subsector suffered the most significant decline, falling by an unadjusted $5.4 billion due to lack of sales, factory shutdowns, and dealership closures.
The personal and household goods subsector suffered the second worse contraction, with a loss in sales of $2.6 billion in April, followed by the textile, clothing, and footwear industry, which saw a decrease of $943 million stemming from reduced sales volumes and retail store closures.
Meanwhile, inventories of wholesale goods increased by 1.2% in April, indicative of a reduction in consumer demand. Although the numbers for April were grim, May is anticipated to show a rebound, as more restrictions are being lifted and many Canadians are returning to work.
Information for this briefing was found via Statistics Canada and Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.