Motor Vehicles Drive an Unexpected Stumble in Canadian Wholesales 

(Bloomberg) -- Wholesale sales in Canada pulled back by the most since 2016 in May on declines in motor vehicles, while a measure of sales to inventories rose to the highest in more than two decades.

The value of wholesales fell 1.8% on the month, the biggest decrease since March 2016, Statistics Canada said Monday from Ottawa. That missed the median forecast in a Bloomberg survey for a gain of 0.5%.

The inventory to sales ratio -- a measure of how many months it would take inventories to be exhausted at current sales levels -- rose to 1.43 in May, the highest since October 1995. Inventories rose 1.1% from the previous month.

The disappointing wholesales report follows a miss in the retail sales data last week, and may cast doubt on the Bank of Canada’s expectation for a significant second-quarter growth rebound.

Sales were down in six of seven industries, driven lower primarily by a 4.3% decline in the motor vehicle industry. Accounting for changes in price, wholesale volumes fell 1.9%.

However, some of the decline in May could be pay back for earlier strength -- March and April saw the fastest 2-month gain in sales and volumes since end of 2015.

Canada’s currency depreciated after the release, trading 0.2% lower at C$1.3083 against its U.S. counterpart at 8:36 a.m. Toronto time.

To contact the reporter on this story: Erik Hertzberg in Ottawa at eschmitzhert@bloomberg.net

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Chris Fournier

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