"Lower oil prices both raise the real incomes of households and reduce costs for firms, and should therefore be beneficial for global growth, notwithstanding the loss of real income for oil producers"
- OECD
Following worse than expected manufacturing sales data, wholesale trade shocked with the biggest decline in six years in January, raising concerns over economic growth for the month. Canada's wholesale sales plummeted 3.1% to $53.7 billion, following the upwardly revised 2.8% gain in December. In volume terms, wholesale sales dropped by 3.3%. Measured on an annual basis, Canadian wholesale sales advanced 7.1%. The motor vehicles and parts component dropped to the lowest level in almost a year in January, plunging 11.3%. The auto industry also recorded weak retail and manufacturing as well as imports sales results during the measured month. Wholesale inventories increased for a 13th consecutive month in January, as stockpiles rose 1.3% to C$70.18 billion. So far all the preliminary data has been suggesting a weaker monthly GDP figure for January. Earlier in the week, Statistics Canada said manufacturing sales declined more than expected in January. Factory shipments dropped 1.7% to C$51.4 billion, the biggest decrease since August and against economists' forecasts for a 1.2% drop. Canada's economy has been struggling amid a precipitous decline in the price of crude oil, the country's main export. The OECD reduced its 2015 and 2016 economic growth outlook for the Canadian economy. The organization is now predicting Canada's economy will expand by to 2.2% this year, while the growth forecast for 2016 has been trimmed to 2.1%.
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