An auto worker at the General Motors assembly plant in Oshawa, Ont., is seen in this file photo.Moe Doiron/The Globe and Mail
Canadian wholesale sales rose more than expected in May as the auto sector helped push results higher.
Statistics Canada reported Thursday that wholesale sales climbed 1.8 per cent to $55.9-billion for the month – above economists' estimate of of 0.2 per cent growth, according to Thomson Reuters.
CIBC chief economist Avery Shenfeld said the bigger than expected gain in wholesale sales will cushion impacts from the Alberta forest fires and weak factory sales in the month.
His note to clients said another "upside surprise" from retailing is unlikely "so May will only be a less-negative month than we might have thought for the overall economy.
Statistics Canada reports retail sales data for May on Friday as well as the consumer price index for June.
The economy was hit hard in May as the wildfire in Alberta stopped work at several oilsands operations and the evacuation of Fort McMurray, Alta.
However, Statistics Canada said six of the seven wholesale sales subsectors it tracks posted gains, while sales were up 1.5 per cent in volume terms.
Motor vehicle and parts subsector posted the largest gain in dollar terms as it rose 3.6 per cent to $10.8-billion. The motor vehicle industry was up 3.7 per cent to hit its highest level since January.
Also making gains were the food, beverage and tobacco subsector which gained 3.2 per cent and the personal and household goods subsector which added 1.5 per cent.
Alberta was the lone province to show a decline in wholesale sales as sales fell 1.6 per cent due in part to the forest fires.
The better-than-expected wholesale sales report came as the Conference Board of Canada cut its expectations for economic growth this year to 1.4 per cent from an earlier forecast of 1.6 per cent.
The think-tank said the year started out strong, but that momentum has largely dissipated.
The Conference Board said that business investment remains the largest source of weakness in the economy and is forecast to decline as investment in the oil and gas sector is expected to continue to slide.
It noted that non-energy firms have not picked up the slack and is also expected to fall this year.
The updated outlook followed a move by the Bank of Canada earlier this month to reduce its forecast for growth this year to 1.3 per cent compared with its April estimate of 1.7 per cent.
The central bank said it lowered its forecast due to a weaker outlook for business investment and exports.