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Weakening momentum in Canada is adding to hopes that the Bank of Canada will begin cutting rates, as both wholesale and manufacturing sales posted declines during March.

Canadian wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and oilseed and grain, dropped 1.1 percent in March. While the decline was broad, retooling at several auto plants led to declines in motor vehicle and motor vehicle parts and accessories subsectors. The miscellaneous subsector fell 5.0 percent, pulled lower by agricultural supplies. Conversely, the machinery, equipment and supplies subsector rose 1.6 percent.

There was also a drop in manufacturing sales in March, down by 2.1 percent, dragged lower by petroleum and coal products and motor vehicles. The drop in motor vehicle sales was also attributed to the retooling at major auto assembly plants. Somewhat offsetting these losses was a 2.9 percent gain in machinery sales, following three consecutive monthly decreases.

Wholesale trade data provides investors with a leading indicator of consumer trends, providing a lens on whether or not production may grow or slow in the future. Manufacturing is the process of turning raw materials or parts into finished goods through the use of tools, human labor, machinery, and chemical processing. Manufacturing accounts for over 10 percent of Canada's gross domestic product.