Canada Manufacturing Sales Increase 0.4% in May

Canadian manufacturing sales increased for the eighth time in nine months, advancing 0.4% to $44.8 billion in May, Statistics Canada reported. The motor vehicle and parts industries were the primary contributors to the higher sales. Excluding motor vehicle and parts, total manufacturing sales edged down 0.1%. Constant dollar manufacturing sales rose 0.4% in May, the ninth consecutive monthly increase.

Higher sales were reported in 9 of 21 industries, representing 48.9% of total sales.

Industries manufacturing durable goods saw sales rise 1.6% in May, more than enough to counterbalance the 0.7% drop in the non-durable goods sector. Lower industrial prices in petroleum contributed to the decrease in non-durable goods.

By Sector
In the transportation equipment sector, which posted a 3.1% increase overall, the motor vehicle industry was up 4.6%, while motor vehicle parts manufacturing increased 2.8%. Other increases in May included miscellaneous manufacturing (+17.9%) and the food industry (+1.5%).

By Province
Ontario (+1.5%) and British Columbia (+2.1%) led the five provinces posting higher sales in absolute terms in May. Nova Scotia (+2.9%), Alberta (+0.3%) and Newfoundland and Labrador (+0.6%) also posted gains.

Higher sales in Ontario were largely attributable to the motor vehicle (+4.5%) and motor vehicle parts (+2.7%) industries, as well as the miscellaneous manufacturing (+35.6%) industry. Manufacturing activity in Ontario has increased in five of the past six months.

In British Columbia, sales increased in paper manufacturing (+6.0%) and computer and electronic product manufacturing (+25.3%).

Sales were down in Quebec (-0.8%), New Brunswick (-5.3%), Saskatchewan (-1.7%), Prince Edward Island (-7.7%) and Manitoba (-0.5%) in May.

In Quebec, manufacturing sales were down in May following a 1.1% increase in April. An 8.4% sales decrease in the petroleum and coal product industry was price and volume based. The chemical industry (-7.4%) also contributed to lower sales.

Manufacturers in New Brunswick also posted lower sales following a strong April. Much of the decline was concentrated in the durable goods sector.

Inventory
Inventory levels decreased 0.7% to $58.5 billion in May following a 0.1% rise in April. The largest inventory decline was in the petroleum and coal product industry (-15.5%). This was partially offset by a 3.4% increase in the fabricated metal product industry.

The inventory-to-sales ratio decreased to 1.30 in May, the lowest level since July 2008. The ratio continued the downward trend which began in the spring of 2009.

Unfilled Orders
Unfilled orders increased 1.3% to $53.4 billion in May. This advance was largely driven by the aerospace product and parts (+1.2%) and the machinery manufacturing industries (+3.0%).

New orders increased 2.5% to $45.5 billion in May. Most of the increases were in the aerospace product and parts, fabricated metal product and machinery manufacturing industries.