UPDATE 2-Canada August wholesale trade rise tops forecasts

* Wholesale trade up 1.2 pct in Aug vs 0.5 pct forecast

* Machinery, equipment, and supplies lead sales
(Adds analysts’ comment, market reaction)

OTTAWA, Oct 20 (BestGrowthStock) – Canadian wholesale trade jumped
a stronger-than-expected 1.2 percent in August from July,
helped by solid sales of machinery, equipment and supplies,
Statistics Canada data showed on Wednesday.

Market traders had expected a 0.5 percent increase over
July, when sales fell unexpectedly. The August figure was the
biggest month-over-month gain since January. In volume terms,
wholesale trade rose 0.9 percent.

The report added to a raft of positive numbers released for
August, following months of less-than-optimistic data that
contributed to the Bank of Canada’s decision to hold pat on
interest rates on Tuesday. For details, see [ID:nN19118876]

The Canadian dollar briefly firmed after the data, rising
as high as C$1.0278, or 97.30 U.S. cents, before softening back
towards Tuesday’s closing level of C$1.0319 to the U.S. dollar,
or 96.91 U.S. cents.

Scotia Capital economists Derek Holt and Gorica Djeric said
the wholesale trade data was “another positive to estimates for
monthly growth in August.” Canadian gross domestic product data
for August comes out on Oct 29. (ECONCA: )

Canada’s August GDP data is “supported by a combination of
positive reports on manufacturing, trade, wholesale trade and
housing starts, only partly offset by flat print on hours
worked,” they said in the note.

The biggest rise in wholesale trade report came in the
machinery, equipment, and supplies subsector, which rose 3.2
percent to its highest level since December 2008.

The only decline came in the food, beverages and tobacco
products subsector, which fell 0.9 percent.

Wholesale inventories declined by 0.3 percent in August,
their first drop in five months. The inventory-to-sales ratio
fell to 1.19 percent in August from 1.21 percent in July. The
ratio measures the time in months required to exhaust
inventories if sales remain at current levels.
(Reporting by John McCrank and Howaida Sorour in Ottawa and
Jeffrey Hodgson in Toronto; editing by Peter Galloway)

UPDATE 2-Canada August wholesale trade rise tops forecasts