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Wholesale sales dropped in December, marking the first month that sales declined since the immediate aftermath of the onset of the pandemic, Statistics Canada reported.

The national statistical agency said that wholesale sales dropped 1.3% in December to $66.5 billion. This was the first monthly decline after seven straight monthly gains.

For 2020, sales in the wholesale sector decreased for the first time annually since 2009 due to the pandemic, StatsCan reported. Sales declined 1% for the year to $754 billion.

Despite the overall decline, wholesale sales increased in five of seven sectors in 2020, StatsCan said, with the strongest gains in the food, beverage and tobacco sector. However, that was more than offset by weakness in the motor vehicle and vehicle parts sector.

By geography, sales decreased in six provinces in 2020, with sales in Ontario dropping sharply. Québec led the provinces with gains.

In December, the drop in sales came due to weakness in the vehicles and vehicle parts sector, followed by the machinery and equipment sector, StatsCan said.

Sales were down 4.3% in the auto sector in December, which “reflected weakness in the domestic demand for Canadian-built vehicles,” the agency noted.

Sales of machinery and equipment sector also dropped 3.1%, it said.

The monthly decline in wholesales sales was actually less than expected, according to a report from Scotia Economics, which noted that StatsCan’s preliminary estimate was for a 1.7% drop.

“A smaller decline might signal slightly better growth prospects for overall GDP in December,” Scotia said.

Despite the 1.3% decline in December, wholesale sales were “still 3.0% higher than levels observed before the Covid-19 pandemic, with all 10 provinces recording higher sales than in February 2020,” StatsCan noted.

In December, sales in five of the seven sub-sectors were higher than their pre-pandemic benchmarks, the agency said.

While the decline came amid the return of provincial governments’ public health restrictions, StatsCan said that the drop was consistent with previous monthly fluctuations. “In 2019, for example, the average monthly movement was plus or minus 1.2%, and no individual month moved more than 1.7% one way or the other,” it reported.

StatsCan also reported that inventories slipped by 0.1% in December to $90 billion.