Wholesale sales rise at fastest rate in three years

OTTAWA — Wholesale trade surged 3% in January to $44.4-billion, the biggest increase in three years, with autos leading gains in every major category, Statistics Canada reported Wednesday.

The monthly totals far outstripped analysts’ projections of a 0.5% gain on the month.

Sales in automotive products advanced for the fourth straight month, up 4.8% to $7.8-billion over the month before.

All seven categories covered in the report advanced.

Four, including autos, accounted for 80% of the gains, the federal agency said. Wholesale sales of building materials rose 4.2% to $6-billion, coinciding with an increase in housing starts. Machinery and electronic equipment rose 2.6% to $9-billion, and “other products” gained 4.1% to $5.5-billion, largely as a result of a surge in agricultural chemicals.

All provinces except Nova Scotia recorded higher wholesale sales in January, with Saskatchewan rising the most, up 18.4% thanks to higher sales of agricultural chemicals.

Inventories fell 1.1% to $52.8-billion, the lowest level since December 2006 and the eleventh monthly drop.

Higher sales and decreased inventories led to a decline in the inventory-to-sales ratio, which fell from 1.24 in December to 1.19 in January. The ratio is a measure of the time, in months, needed to exhaust inventories if sales remain at current levels.

At its peak the ratio stood at 1.44 in March 2009.