Statistics Canada reported on Friday the wholesale sales fell 0.7 percent m-o-m to CAD68.76 billion in February, following an unrevised 4.0 percent m-o-m advance in January. This marked the second decline in wholesale sales in the last three months. Despite the drop, sales in February were the second-highest on record for the sector.

Economists had forecast a 0.4 percent m-o-m drop for February.

According to the report, sales went down in four of the seven subsectors, led by building material and supplies (-6.1 percent m-o-m), and motor vehicle and motor vehicle parts and accessories (-2.5 percent m-o-m).

Excluding motor vehicle and motor vehicle parts and accessories subsector, wholesale sales decreased 0.3 percent m-o-m.

In y-o-y terms, wholesale sales rose 6.5 percent in February.

Meanwhile, wholesale inventories jumped 1.1 m-o-m in February to CAD92.24 billion, recording their third monthly gain in a row, which was the largest one since June 2019. Inventories increased in five of the seven wholesale subsectors, with the machinery, equipment and supplies (+2.4 percent m-o-m) and the personal and household goods (+1.9 percent m-o-m) subsectors registering the largest advances.

In y-o-y terms, wholesale inventories increased 1.1 percent in February.

The inventory-to-sales ratio rose to 1.34 in February from 1.32 in January.