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Home » Motor Vehicle Sector Boosts Canadian Manufacturing in July
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Motor Vehicle Sector Boosts Canadian Manufacturing in July

By    MDM  Staff 
September 22, 2009
More about:  Canada,  Economic Trends,  Industrial Distribution
Canadian manufacturing sales were up from June, but down 22.4% from the year-ago period.
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Manufacturing sales increased 5.5% to $41.4 billion in July, building on the 2.2% increase in June, according to the latest report from Statistics Canada. The motor vehicle, motor vehicle parts and the primary metals industries were the major contributors to the rise in sales in July. Manufacturing sales in July remained 22.4% below the $53.3 billion posted a year earlier. Excluding the motor vehicle assembly and motor vehicle parts industries, manufacturing sales increased 2.1%.

Constant dollar manufacturing sales rose 5.5% in July. Sales in 15 of 21 manufacturing industries increased in July, representing 66% of total sales.
 
Motor Vehicle Sales
Sales in the motor vehicle industry rose 48.2% in July to $3.3 billion, as some assembly lines resumed production following extended shutdowns in recent months. Sales of motor vehicles were lower than levels seen over the past few years. July motor vehicle sales were down 22.6% from sales in July 2008.
 
Sales in the motor vehicle parts industry increased 30.0% to $1.5 billion in July, reflecting higher demand from assembly plants.
 
Sales in the primary metals industry rose 11.2% to $2.7 billion.
 
Aerospace products and parts (+12.2%) and plastics and rubber products (+9%) also made important contributions to the overall manufacturing strength in July.
 
Petroleum and coal products (-3.6%) and food (-1.3%) posted the largest sales declines in July. In the petroleum and coal products industry, lower prices (-5.2%) accounted for the drop in manufacturing sales. Lower sales volumes were responsible for the decrease in the food industry.
 
By Province
Sales in Ontario rose 11.9% in July, reflecting increased sales of motor vehicles and motor vehicle parts. Excluding motor vehicles and motor vehicle parts, Ontario's manufacturing sales rose 4.1%. Higher sales of primary metals (+34.2%) also contributed to the province's gains in July.
 
In Quebec, sales increased 4.0% in July, building on the 6.0% rise in June. The provincial advance was broadly based as higher sales were seen in 17 of 21 industries. The aerospace industry (+6.4%) posted the largest increase in production in dollar terms.
 
Sales fell by 4.0% in Alberta in July, largely as a result of a 10.7% drop in food sales. A 3.8% decline in petroleum and coal product sales contributed to the provincial weakness in sales.
In Manitoba, sales fell 4.7% in July. Transportation equipment manufacturing (-13.1%), fabricated metal products (-16.9%) and primary metals (-8.1%) contributed to the decline.
 
Saskatchewan (-1.9%), Newfoundland and Labrador (-1.2%), Nova Scotia (-1.2%) and British Columbia (-0.8%) were other provinces with declines in sales.
 
Inventories
Manufacturers reported a 2.0% decline in inventories compared with June, with levels falling to $61.3 billion. Inventories have been decreasing since January 2009.
 
Petroleum and coal product inventories declined 12.1%, reflecting both a fall in petroleum prices and volume decreases. Wood products (-5.1%), primary metals (-4.8%) and fabricated metal products manufacturers (-3.4%) were other industries with large declines in the value of inventories.
 
The rise in overall manufacturing sales, combined with the decrease in inventories, caused the inventory-to-sales ratio to drop from 1.60 to 1.48. However, the inventory-to-sales ratio is above values seen in 2007 and 2008.
 
Unfilled Orders
The backlog of unfilled orders fell 4.3 percent in July to $57.1 billion. The decrease largely reflects a 6.4 percent decline in the aerospace industry. Excluding aerospace products and parts, unfilled orders fell 2 percent.
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