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Canadian Manufacturing Sales Edge Down 0.3% in February

Canadian manufacturing sales edged down 0.3 percent to $49.1 billion in February, following a 1.3 percent decrease in January, according to Statistics Canada. Lower sales were recorded for the motor vehicle assembly, food, and motor vehicle parts industries. These declines were mostly offset by increases in the aerospace product and parts, non-metallic mineral products, and petroleum and coal products industries.

Sales decreased in 11 of 21 industries, representing about 64 percent of Canadian manufacturing. Sales of durable goods rose 0.2 percent while those of non-durable goods declined 0.8 percent.

Constant dollar sales fell 0.1 percent in February, indicating a decrease in the volume of manufactured goods.

By Segment
Motor vehicle assembly sales were down 8.7 percent, the first decline since June 2011. Similarly, motor vehicle parts sales were down 7.2 percent, the first decrease since August.

Food manufacturers posted the second-largest decline in sales in dollar terms, down 3.1 percent to $6.9 billion. This was the largest decrease in the industry since June 2010 and partly reflected declines in the grain and oilseed milling industry, and the seafood product preparation and packaging industry.

In the chemical industry, sales declined 2.5 percent to $4.0 billion. The decrease reflected lower volumes reported by a large number of manufacturers.

These declines were largely offset by increases in the aerospace product and parts, non-metallic mineral product, and petroleum and coal products industries.

In the aerospace product and parts industry, production advanced 32.1 percent to $1.2 billion in February, following a 32.7 percent drop in January.

Non-metallic mineral product sales were up 22.9 percent to $1.2 billion. Some manufacturers indicated that favourable weather conditions stimulated sales related to construction activity.

Petroleum and coal products manufacturers reported a 3 percent increase in sales. The increase partly reflects a 1.7 percent rise in prices in the industry.

By Province
The vast majority of the sales declines were in Ontario, where manufacturers reported a 2.7 percent decrease to $22 billion, following a decrease of 1 percent in January. Sales decreased in 13 of 21 industries, representing more than three-quarters of the province's manufacturing. In particular, motor vehicle assembly sales fell 9.1 percent while motor vehicle parts sales were down 7.3 percent. A 5.0 percent decline in the food industry also contributed to the decrease.

In contrast, manufacturing sales advanced 2.7 percent to $11.9 billion in Quebec. The increase reflected higher sales in the petroleum and coal products and machinery industries. An increase in production in the aerospace product and parts industry also contributed to the provincial gain.

Sales in Alberta were up 1.8 percent to $6.5 billion. A 6.5 percent gain in petroleum and coal products sales was largely responsible for the increase.

Inventories rose 0.3 percent in February to $65.8 billion, the 16th gain in 17 months. Inventories were up in 10 of 21 industries.

Inventory levels in the computer and electronic products industry advanced 5.0 percent to $3.4 billion. Higher inventories of raw materials were responsible for most of the gain.

In the machinery industry, inventories rose 1.4 percent to $6.9 billion. Manufacturers reported higher inventories for all three stages of fabrication: raw materials, goods in process and finished products inventories.

Petroleum and coal products inventories advanced 1.7 percent to $4.9 billion. A number of refineries increased the value of finished products on hand in February.

Most of these gains were offset by declines in the fabricated metal product (-1.0 percent), other transportation equipment (-11.9 percent) and motor vehicle assembly (-4.2 percent) industries.

The inventory-to-sales ratio advanced to 1.34 in February from 1.33 in January. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled Orders
Unfilled orders rose 1.9 percent to $61.6 billion in February, the first increase since November 2011. Despite the gain in February, unfilled orders have been relatively flat since September 2011.

A 3 percent advance in the aerospace product and parts industry was mostly responsible for the increase. Excluding this industry, unfilled orders were up 0.9 percent.

In the machinery industry, unfilled orders rose 7.6 percent to $8.0 billion. The gain was concentrated in the engine, turbine and power equipment manufacturing industry.

New orders increased 2.5 percent to $50.3 billion in February, the seventh gain in nine months. The gain largely stemmed from increases in the aerospace product and parts, and machinery industries.

© 2017 Gale Media, Inc.

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