Manufacturing Sales Rose 1.6% in August

Economy

 

Oct 31, 2017

Following two consecutive monthly declines, manufacturing sales increased 1.6% to $53.5 billion in August. The gain was mainly attributable to higher sales in the transportation equipment, and petroleum and coal product industries. Sales were up in 8 of the 21 industries, representing 66% of the Canadian manufacturing sector. Once price changes are taken into account, sales volume in the manufacturing sector rose 1.2% in August.

Sales up in 8 provinces

Sales increased in eight provinces in August, led by Ontario and Alberta, while Manitoba and Nova Scotia reported declines.

After two consecutive months of declines, sales in Ontario rose 2.8% in August to $24.9 billion, primarily due to a 10.4% gain in the transportation equipment industry. The petroleum and coal product and machinery industries also reported higher sales.

In Alberta, sales were up 1.2% to $5.8 billion, following two monthly decreases. Increases were recorded in 13 of the 21 industries. The petroleum and coal product (+4.4%) and the fabricated metal product (+6.9%) industries were largely responsible for the gain in this province.

The largest monthly decrease was in Manitoba, where sales fell 1.5% to $1.5 billion in August. This was the second consecutive monthly decline and was largely due to lower sales of non-durable goods.

Inventories are unchanged

Inventories in the manufacturing sector were steady at $73.9 billion in August, with higher inventories in the machinery industry offset by lower inventories in the petroleum and coal product industry.

The inventory-to-sales ratio fell from 1.40 in July to 1.38 in August. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders are unchanged

Total unfilled orders for the manufacturing sector were unchanged at $86.2 billion in August. More unfilled orders in the aerospace product and parts, and the electrical equipment, appliance and component industries were offset by fewer unfilled orders in the computer and electronic product and machinery industries.

New orders rose 4.4% to $53.6 billion in August, following three consecutive monthly declines. The gain was mostly attributable to more new orders in the transportation equipment; electronic equipment, appliances and components; and the petroleum and coal product industries.

The transportation equipment and petroleum and coal product industries post the largest gains

Sales in the transportation equipment industry rose 8.2% to $10.4 billion, after falling 13.6% in July. This growth was the result of gains in the motor vehicle (+12.9%) and motor vehicle parts (+5.7%) industries, primarily reflecting higher volumes generated by increased production after the longer-than-usual shutdowns of motor vehicle assembly plants in July. In constant dollars, sales volumes rose 13.3% in the motor vehicle and 5.8% in the motor vehicle parts industries in August.

Sales in the petroleum and coal product industry increased 3.2% to $4.8 billion in August—a second consecutive monthly gain. The increase primarily reflected higher prices for petroleum and coal products. After removing the effect of price changes, sales volumes decreased 1.3% in August.

Sales were also up in the primary metal (+3.1%), machinery (+4.0%), beverage and tobacco product (+4.2%) and wood product (+1.6%) industries.

These gains were widespread and were the result of higher volumes in these industries.

Higher sales in current dollars were partially offset by decreases in the chemical (-3.6%) and computer and electronic product (-6.5%) industries. In constant dollars, sales fell 3.9% in the chemical and 6.5% in the computer and electronic product industries, indicating that a lower volume of goods sold was behind these declines.

Source: Statistics Canada, https://www.statcan.gc.ca/daily-quotidien/171018/dq171018a-eng.htm

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