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OTTAWA (Reuters) - Greater business demand for machinery and equipment helped boost Canadian wholesale trade by 0.7 percent in December from November while inventories shrank to a three-year low, Statistics Canada said on Wednesday.
The increase beat market estimates of 0.5 percent sales growth in the month. Statscan revised the November sales growth to 2.7 percent from 2.5 percent previously.
Statscan said strength was spread across six of the seven wholesale sectors.
Machinery and equipment sales, which includes computers and office equipment, contributed most to the gains with a 1.2 percent increase. The performance supports a Bank of Canada business survey which indicated that businesses were prepared to increase investments as the financial crisis fades.
Fertilizer and agricultural supplies, building materials and automotive products also recorded healthy gains.
Inventories fell for the tenth straight month, down 0.5 percent to their lowest since December 2006. The increased sales combined with declining inventories resulted in an inventory-to-sales ratio of 1.25 in December, down from 1.37 a year earlier.
Reporting by Louise Egan, Editing by Chizu Nomiyama