- David Watt, HSBC Bank Canada Chief Economist
The value of Canada's wholesale trade unexpectedly declined in August as sales dropped in sectors including machinery and motor vehicles, Statistics Canada reported. Sales ticked down 0.1% to C$55.3 billion, while July's flat result was revised to a 0.1% decrease. In volume terms, August wholesale sales declined 0.5%. Four sectors dropped, accounting for 72% of wholesale trade. The machinery, equipment and supplies sector fell 2.4% to the lowest level since April 2014, while the motor vehicle and parts sector edged lower 1.2%. Meanwhile, wholesale inventories soared to the highest dollar value on record, climbing 0.6% to C$73.2 billion, with gains being led by personal and household goods as well as machinery, equipment and supplies.
Wholesale data came just a day before the Bank of Canada makes its interest rate announcement coupled with the release of the Monetary Policy Report. Analysts expect the central bank to maintain rates unchanged and upgrade its short-term economic outlook. The BoC has already cut interest rates twice this year. At the latest September meeting, the central bank left its overnight rate steady at 0.5%, while its statement had a mixed tone.
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