Statistics Canada released data today showing a huge drop in wholesale sales for January 2023. With the exception of petroleum, petroleum products and other hydrocarbons, and oilseed and grain, wholesale sales were down 1.5 percent. This dramatic drop underscores how different types of wholesale have been affected across the industry.
With a few categories excluded from overall wholesale sales to reflect true sales, that figure fell to $85.2 billion. That’s where the bad news starts to come in, as over a third of our subsectors posted losses. Only the mineral, ore, and precious metal wholesaling sector saw a deeper dive. It crashed down by 38.3 percent, capping off at $941.5 million for January. This recent downturn is most unusual. Just a month prior in December, this sector had increased by a record-breaking 85.7 percent.
The mineral sector had a difficult year. The drop was propelled by a motor vehicles and motor vehicle parts and accessories subsector’s widespread trouble. This sector saw a drop of 3.9 percent, lowering its total sales to $13.5 billion in January. With wholesale sales, the automotive market is incredibly important. Today, it is going through a period of uncertainty and upheaval that is troubling many within the industry.
On the flip side, there were a few encouraging trends amid the wholesale turmoil. Despite these challenges, the food, beverage, and tobacco subsector proved its mettle, ending with a slightly positive trend of 1.6 percent, for $15.9 billion. This increase is an indication that consumer demand in this product category is healthy, regardless of the ongoing overall market headwinds.
These mixed results by sector have led to a complicated picture of the wholesale market this January. Some sectors, such as food and drinks, saw phenomenal annual growth. The reality is that most wholesalers are suffering from deep cuts elsewhere. The acute decline in mineral and precious metal sales is striking enough in its own right to describe it as a dominating feature depressing topline results.
