OTTAWA (Reuters) - Canadian wholesale trade expanded by a stronger-than-expected 0.9 percent in October, partially regaining some of the previous month’s losses as six of seven subsectors reported gains, Statistics Canada said on Wednesday.
Analysts had predicted wholesale activity would grow just 0.3 percent in the month.
In volume terms, wholesale trade was up 0.8 percent and excluding the auto sector, it was also up 0.8 percent. Statscan revised the September data to show a decline of 1.5 percent compared with a 1.4 percent drop initially reported.
Wholesale sales rose 2.2 percent from October 2011.
The strong wholesale figures contrast with other data pointing to a weak economy in October, but economists still expect growth in the fourth quarter as a whole to be sharply lower than the Bank of Canada’s latest projection of 2.5 percent annualized growth. Third-quarter growth was a disappointing 0.6 percent.
“This is welcome and should help buffer weakness expected in industry level gross domestic product which is currently tracking flat,” said Mazen Issa, macro strategist for TD Securities.
“Tomorrow’s retail sales figures will help firm up our estimate for monthly GDP but looking at the quarter as a whole, we expect that it will be another disappointing quarter for growth (our official estimate is 1.2%),” he said.
The food, beverage and tobacco industry accounted for the biggest gain in dollar terms in the month, rising 1.2 percent due to a sharp rise in food sales. The auto industry rose 1 percent, the first gain in four months thanks to a spike in sales of new motor vehicle parts and accessories. Pharmaceuticals also reported hefty gains.
Inventories grew in October for the 10th time in 11 months, rising 0.2 percent, while the inventory-to-sales ratio declined to 1.25 from 1.26 in September.
Reporting by Louise Egan and Alex Paterson; Editing by James Dalgleish