OTTAWA (Reuters) - Canadian wholesale trade jumped a stronger-than-expected 1.2 percent in August from July, helped by solid sales of machinery, equipment and supplies, Statistics Canada data showed on Wednesday.
Market traders had expected a 0.5 percent increase over July, when sales fell unexpectedly. The August figure was the biggest month-over-month gain since January. In volume terms, wholesale trade rose 0.9 percent.
The report added to a raft of positive numbers released for August, following months of less-than-optimistic data that contributed to the Bank of Canada’s decision to hold pat on interest rates on Tuesday.
The Canadian dollar briefly firmed after the data, rising as high as C$1.0278, or 97.30 U.S. cents, before softening back toward Tuesday’s closing level of C$1.0319 to the U.S. dollar, or 96.91 U.S. cents.
Scotia Capital economists Derek Holt and Gorica Djeric said the wholesale trade data was “another positive to estimates for monthly growth in August.” Canadian gross domestic product data for August comes out on Oct 29.
Canada’s August GDP data is “supported by a combination of positive reports on manufacturing, trade, wholesale trade and housing starts, only partly offset by flat print on hours worked,” they said in the note.
The biggest rise in wholesale trade report came in the machinery, equipment, and supplies subsector, which rose 3.2 percent to its highest level since December 2008.
The only decline came in the food, beverages and tobacco products subsector, which fell 0.9 percent.
Wholesale inventories declined by 0.3 percent in August, their first drop in five months. The inventory-to-sales ratio fell to 1.19 percent in August from 1.21 percent in July. The ratio measures the time in months required to exhaust inventories if sales remain at current levels.
Reporting by John McCrank and Howaida Sorour in Ottawa and Jeffrey Hodgson in Toronto; editing by Peter Galloway