Over the weekend, Alberta’s still-current premier, Jason Kenney, sent out the following tweet:
There’s something here we need to discuss.
This tweet is based on an article posted by The Owl, an online publication produced by ATB Economics.
In this article, ATB economist Siddhartha Bhattacharya reported that “Wholesale revenues continued to advance in Alberta for the second straight month and led the gains nationally.” He also said that wholesale “sales in Alberta climbed $168 million to reach a record high of $8.7 billion in April”.
And while that’s all true, it’s missing some context.
This article, which Kenney’s tweet image cited, is itself using data that Statistics Canada recently published.
Now, what must be made clear is that the wholesale trade data that Statistics Canada tracks is sales value, not sales volume.
In other words, it tracks how much everything sold for in the wholesale trade sector, not how many units were sold in that sector.
This means that just because the number is higher doesn’t mean that companies are selling more units. It’s possible that the prices of the units increased.
For example, if a company saw $1 million in wholesale sales in March on 10,000 units, they were selling the units for $100 a piece.
However, if they increased the price to $120 per unit but sold 10,000 units again in April, their total value of their manufacturing sales would’ve been $1.2 million.
That means their sales will have increased by $200,000 or 20%.
On that note, take a look at these two charts.
The first chart shows what wholesale sales has looked like over the 10-year period between April 2012 and April 2022. The second shows the annual change in the consumer price index—also known as inflation—during the same period.
Notice anything?
The peaks and valleys in the first chart roughly mirror the peaks and valleys of the second chart.
As inflation increased in 2013, wholesale sales increased as well. As inflation increased in 2017 and 2018, so did wholesale sales.
And as inflation as skyrocketed over the last 6 months, so, too, has the value of wholesale sales in Alberta.
So, while it’s true that “seasonally-adjusted sales climbed $168 million (+2.0%) to reach a record high of $8.7 billion in April”, as Bhattacharya reported, it’s hardly because “Alberta’s Recovery Plan is working”, as Kenney claimed.
This has more to do with the fact that everything is so much more expensive (transportation, raw materials, equipment, etc) than it does with anything the UCP government has done.
