OTTAWA (Reuters) - Canadian wholesale trade baffled expectations for a fall and climbed 1.6 percent in February from the month before, Statistics Canada said on Monday, signaling a strengthening in gross domestic product (GDP) data next week.
The price-adjusted volume of sales, used in calculating real GDP growth, increased even more quickly, by 2.2 percent.
“Today’s data suggest that (February’s) GDP reading could come in stronger than previously envisioned,” said Emanuella Enenajor at CIBC World Markets.
“While we still wait for the month’s retail report..., February activity looks to be tracking an overall GDP gain of roughly 0.2 percent or so.”
Statscan will release February GDP data at 8:30 a.m. EDT (1230 GMT) on April 30. GDP edged up by 0.1 percent in January.
The rise in wholesale trade followed a drop of 1.1 percent in January, revised from an originally reported 1.0 percent drop. The median forecast in a Reuters survey of analysts was for a 0.3 percent decline in February.
Statscan said the biggest increase in dollar terms was in the motor vehicle and parts sector, which rose 2.7 percent, with the motor vehicle component up 3.4 percent. Excluding that sector, wholesale trade was still up a solid 1.4 percent.
All sectors registered a rise except food, beverages and tobacco, whose decline was only 0.1 percent. Machinery and equipment, key to boosting Canada’s productivity and the economy’s capacity to grow, was up 1.7 percent on the month and 11.1 percent from a year earlier.
Inventories rose 1.1 percent and the ratio of inventory to sales held at 1.22.
Reporting by Randall Palmer; Editing by Peter Galloway