Canadian Manufacturing Sales Edge Up in November

Sales gains in chemical manufacturing and in petroleum and coal products were offset by declines in the aerospace product and parts and motor vehicle industries.

Constant dollar manufacturing sales decreased 0.8% in November. This was the first decrease in constant dollar sales in three months. Even with the recent advances, constant dollar manufacturing sales were 8.4% below November 2008.

Sales advanced in 12 of the 21 manufacturing industries, accounting for about 57% of total sales.

Results by Sector
Most of the sales gains for November were in non-durable goods industries, which increased 1.0% compared with October.

Sales by chemical manufacturers advanced 5.3% compared with October. About one-third of the gain was a result of rising pharmaceutical and medicine manufacturing sales.

Sales by the petroleum and coal product industry rose 2.9% in November, the third increase in four months. Sales in this industry were pushed up by higher prices, which increased 4.7% from October.

The transportation equipment industry offset most of the sales gains in November, declining 4.3%. Production in the aerospace product and parts industry pulled back 15.4% after a 48.2% jump the previous month. Motor vehicle sales were also down, decreasing 4.5% after two months of gains.

Results by Province
Half of the provinces posted increased sales in November, with the largest gain in New Brunswick where manufacturing sales advanced 15.2%.

Alberta continued to report stronger manufacturing sales in November, with rising sales in the past four months largely attributable to petroleum and coal product sales, which reached the highest level for the province since October 2008. Sales in Quebec advanced 0.6% in November, despite a 10.6% drop in transportation equipment sales. Petroleum and coal products (5.2%) and primary metals (4.9%) led the provincial gains.

Manufacturing sales in Newfoundland and Labrador fell 9.1% compared with October, mostly due to weaker sales of non-durable goods. Manitoba also reported lower sales for November, decreasing 2.9%.

Inventories
Inventory levels declined 0.3% in November to $59.7 billion. This was the 10th decrease in 12 months, moving inventories 12.2% lower than November 2008 levels. Inventory levels contracted in 16 of 21 industries, led by a 3.4% drop in the transportation equipment industry. Aerospace product and parts inventories were behind most of that decrease.

Non-durable goods inventories rose 1.4%, despite decreases in 7 of 11 industries. The increase was led by a 10% rise in petroleum and coal product inventories, partly reflecting higher prices compared with October.

The inventory-to-sales ratio declined for the fifth time in six months, edging down to 1.40. The decline in November was largely the result of lower inventory levels, pushing the ratio to its lowest level since October 2008 (1.34).

Unfilled Orders
The backlog of unfilled orders declined in November for a fifth consecutive month, down 1.4% to $51.5 billion, the lowest level since March 2007. The decrease was led by machinery (-3.0%) due to a major plant closure at the end of October. Aerospace product and parts (-2.6%) also contributed to the decline.

Excluding the aerospace industry, unfilled orders edged down 0.2% in November.

New orders increased by 3.2% in November to $41.9 billion, reversing a 2.2% drop in October. This was the third gain in four months.