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Wholesale Services Price Index, first and second quarter 2020

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Released: 2020-09-22

In a context marked by the contraction of the Canadian economy and plummeting sales in the majority of the wholesale trade sector because of the COVID-19 pandemic, the Wholesale Services Price Index (WSPI) increased in the first two quarters of 2020. The WSPI was up 0.9% in the first quarter and 0.1% in the second quarter.

In terms of margins, the wholesale sector performed better during the current recession than during the 2008/2009 economic recession, when margins fell 2.6% in the first quarter of 2009 before advancing 0.6% in the second quarter of the same year.

For more details on COVID-19's impact on the wholesale sector, please consult "COVID-19 Impact Analysis and 2020 Outlook: Wholesale Services Price Index."

In late October, Statistics Canada is scheduled to release an analytical paper on COVID-19's impacts on fresh and frozen beef prices in Canada.

For a detailed and interactive view of the data, please consult Statistics Canada's "Wholesale and Retail Services Price Indexes: Interactive Tool." This tool allows data users to explore current and historical margin trends for various types of wholesaling and retailing services.

Chart 1  Chart 1: Wholesale Services Price Index
Wholesale Services Price Index

Quarter-over-quarter highlights

First quarter of 2020

In the first quarter, influenced by the rail blockade, margins were up in all subsectors except petroleum and petroleum products merchant wholesalers, which posted a 5.6% margin decrease, as a result of declining crude prices since the end of 2019. This ongoing decrease was exacerbated by the COVID-19 lockdown and travel restrictions across Canada beginning in March 2020.

Second quarter of 2020

The increase in the WSPI in the second quarter was led by miscellaneous merchant wholesalers (+3.5%); machinery, equipment and supplies merchant wholesalers (+1.3%); petroleum and petroleum products merchant wholesalers (+5.0%); and food, beverage and tobacco merchant wholesalers (+1.6%). Petroleum and petroleum products merchant wholesalers posted the largest gain among the eight subsectors, as prices partially recovered from their collapse in April after travel restrictions started easing across Canada.

The margin gains in the second quarter were moderated by building material and supplies merchant wholesalers (-4.4%), which posted the largest margin decline, because of shutdowns in the construction industry during the pandemic. Margins for metal service centres (-11.1%) and electrical wiring and construction supplies merchant wholesalers (-8.4%) led the decline in this subsector.

Year-over-year changes

First quarter of 2020

The WSPI decreased 2.4% in the first quarter compared with the first quarter of 2019, led by petroleum and petroleum products merchant wholesalers (-17.3%); miscellaneous merchant wholesalers (-7.2%); machinery, equipment and supplies merchant wholesalers (-2.8%); and building material and supplies merchant wholesalers (-2.5%).

Second quarter of 2020

In the second quarter, the WSPI was down 2.7% on a year-over-year basis, the sixth consecutive decline since the first quarter of 2019, as a result of lower margins recorded in five of the eight subsectors.

The year-over-year decline in the WSPI was led by petroleum and petroleum products merchant wholesalers, which recorded the largest decline (-28.4%) among the subsectors, because of the collapse of crude prices, particularly in April following the COVID-19 lockdown.

Building material and supplies (-6.1%), personal and household goods (-1.6%), and miscellaneous (-1.4%) merchant wholesalers also contributed to the year-over-year decline.

Moderating the year-over-year decline were higher margins recorded by farm product merchant wholesalers (+7.1%) and by food, beverage and tobacco merchant wholesalers (+5.3%).

The margin gains posted by food, beverage and tobacco merchant wholesalers demonstrated a certain resilience in this subsector amid the COVID-19 lockdown, as grocery stores remained open and demand was strong (and even up) despite the closure of some wholesale customers, notably restaurants.


  Note to readers

The Wholesale Services Price Index (WSPI) represents the change in the price of the wholesale service. The price of the wholesale service is defined as the margin price, which is the difference between the average purchase price and the average selling price of the wholesale product being priced. The WSPI is not a wholesale selling price index.

With each release, data for the previous quarter may have been revised. The series are also subject to an annual revision with the release of second-quarter data of the following reference year. The indexes are not seasonally adjusted. Data are available at the Canada level only.

Products

Statistics Canada is publishing a series of analyses on COVID-19's impacts on different sectors of the Canadian economy entitled "COVID-19 Impact Analysis and 2020 Outlook" to provide data users with some insights regarding the price movements of selected industries. The COVID-19 impact analysis on the retail trade sector during the first two quarters of 2020 will be released in mid-October.

Statistics Canada has released the "Wholesale and Retail Services Price Indexes: Interactive Tool" for wholesale and retail services price indexes. This Web-based application gives access to wholesale and retail margin data by category.

Statistics Canada has launched the Producer Price Indexes Portal as a part of a suite of portals for prices and price indexes. This web page provides Canadians with a single point of access to a wide variety of statistics and measures related to producer prices.

The video "Producer Price Indexes" is available on the Statistics Canada Training Institute web page. It provides an introduction to Statistics Canada's producer price indexes—what they are, how they are produced and what they are used for.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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