A sharp drop in automotive sales pushed Canadian wholesale trade unexpectedly lower by 3.1% in April from March, wiping out strong gains made in the previous two months, Statistics Canada said.

The decline, the sharpest since August 2003, followed a revised growth rate of 2.3% in March and 0.9% in February. Analysts had forecast, on average, that wholesale trade would climb by 0.5%.

Wholesalers' inventories swelled by 0.5% in April, which pushed the inventory-to-sales ratio up to 1.28, near a three-year high, from 1.23 in March.

Sales in the automotive sector plummeted 8.3% as a result of weaker vehicle sales but Canada's retail market remains strong and vehicle sales in the January-April period were up four percent year-on-year, the agency said.

Other sectors noting strong setbacks in sales included "other products", which are mainly agriculture and chemical products, and machinery and electronic equipment. Food, beverage and tobacco products as well as personal and household goods edged higher. (Reuters)