Lumber Prices Slant Subsector Sales Numbers

Wholesale sales grew one per cent in September to $71.3 billion, the fifth increase in the past seven months, says Statistics Canada. Sales of agricultural supplies (part of the miscellaneous subsector) and machinery, equipment and supplies generated the gain in September. Lower sales in the motor vehicle and motor vehicle parts and accessories subsector and the building material and supplies subsector partially offset the increase. Overall sales rose in four of seven subsectors, representing nearly 70 per cent of the sector. Notwithstanding the higher sales in both August and September, wholesale sales in the third quarter fell 1.6 per cent to $212 billion. This was the first quarterly decline since the second quarter of 2020. The decline was entirely as a result of a drop in sales of lumber, millwork, hardware, and other building supplies which was generated by a steep decline in the prices for softwood lumber. Excluding the decrease in that industry, wholesale sales rose one per cent. For September, building material and supplies wholesalers had a 1.4 per cent drop in sales to $11.2 billion. September marked the third time in the past four months that the subsector recorded lower sales of building materials. Sales in the lumber, millwork, hardware and other building supplies industry have fallen by 30.4 per cent in the past four months, after reaching an all-time high of $8.1 billion in May 2021. Notably, exports of forestry products and building and packaging materials fell 8.1 per cent in September. However, despite the recent cooling of sales in the subsector, it is still performing at historically strong levels. Sales in September 2021 were 14.4 per cent higher than in September 2020.