Canadian wholesale sales fell 0.6% to $41.0 billion in current dollars on-month in February, according to data released Tuesday by Statistics Canada. Declining sales in the machinery and equipment trade group and the other products sector were major factors contributing to this decrease. In terms of the volume of sales, wholesale sales were flat.

Canadian wholesalers sell to both the domestic and international markets, and are active importers and exporters. The decline in sales reflected both lower export demand for Canadian goods, a significant part of which flows through wholesale markets, and weaker sales in Canada.

In February, four out of seven sectors, accounting for over two-thirds of total wholesale sales, posted declines.

The machinery and electronic equipment sector declined 1.6%, largely as a result of lower sales in the machinery and equipment trade group (-5.2%), which accounts for close to half of the sales in this sector. Within this trade group, declines were observed in industrial as well as in mining, oil and gas well machinery and equipment wholesalers.

The largest increase came in the automotive products sector, which rose 4.0% in February, following a 21.8% decline in January. Sales of motor vehicles increased 9.4%, offsetting some of the losses in January. Sales in motor vehicle parts and accessories fell 7.6% in February, its largest drop since April 2003.

Inventories edged up 0.1% in February.

Among the 15 wholesale trade groups, 7 reported higher inventory levels, including alcohol and tobacco (+2.2%), office and professional equipment (+1.5%) and building supplies (+1.3%).

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