Saskatchewan’s merchants collected roughly $2.8 billion less in wholesale trade last year, compared to 2015, according to a Statistics Canada report released on Monday.
The decline from $26.535 billion in 2015 to $23.722 billion in 2016 represents a 10.6 per cent decrease, marking the largest drop Canada. Nation-wide, wholesale merchant sales were up in 2016 by 3.1 per cent.
PotashCorp Q4 profit hit by weak prices, low margins for fertilizers
Cameco CEO ‘cautiously optimistic’ that better days will come in 2017
READ MORE: Saskatchewan leads country in December 2016 manufacturing sales growth
Saskatchewan statistics consultant and analyst Doug Elliott said the drop off is “not abnormal in the province unfortunately,” which has seen many economic indicators decline recently after years of growth.
“I guess it’s alarming in the short term because it looks like maybe we’ll have another bad year in the coming year,” Elliott, who publishes Sask Trends Monitor, said in an interview Monday.
“We have to remember that 2016 may have been a lot worse than 2015, but it was a lot better than five or ten years ago.”
Elliott said he attributes much of 2016’s decrease to a drop in sale prices. It’s an assertion backed up the Agricultural Producers Association of Saskatchewan, whose president said its members have seen the decline first hand.
“The livestock and cattle sector saw a pretty significant drop off in their pricing this year, in some cases thirty to forty per cent,” Todd Lewis, the association’s president, said in an interview.
READ MORE: Canada to drop out of top 20 economies by 2050: PwC report
Canada’s farm product wholesale industry saw a 10.9 per cent decrease in sales in 2016, which largely affected the Prairie provinces. Lewis said it’s hard to predict what 2017 will bring, however his group is hopeful the market’s prices will rise.
“We’ll see what the weather brings us and what the future holds,” Lewis said.
As for the entire wholesale industry, Elliott said Saskatchewan will likely not see a large bounce back this year, especially if the province lays off public sector workers in its upcoming budget.
“That [would] dampen consumer confidence, so there will be less money spent in the retail sector which will ricochet into the whole sale trade sector,” Elliott said.
“If I had to guess I would suggest that 2017 is probably going to be another year like 2016 for the wholesalers, which is down from a year ago, but not the end of the world.”
The province’s wholesale merchants will get their first look at the 2017 trend line when Statistics Canada releases January’s data in a month.