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Manufacturing sales edged down 0.3 percent to $49.5 billion in March, the third decline in four months, according to Statistics Canada. The decline largely reflects lower sales in the petroleum and coal product, and chemical manufacturing industries.
Petroleum and coal product sales dropped 2.6 percent in March to $6.9 billion – the lowest level since July 2012. Lower prices were a major factor in the decrease. Excluding these industries, manufacturing sales rose 0.3 percent.
Overall, sales declined in 10 of 21 industries, representing approximately one-third of Canadian manufacturing. Constant dollar manufacturing sales increased 0.2 percent, indicating a slight increase in volumes once prices are taken into account.
Sales of non-durable goods declined 0.8 percent to $24.4 billion and were partially offset by a 0.2 percent increase in sales of durable goods.
Sales in the chemical manufacturing industry declined 2 percent to $3.9 billion in March, the second drop in nine months. Colder weather in many parts of the country in March may have contributed to weaker than normal fertilizer sales.
These declines were partially offset by higher sales in the plastics and rubber products, and motor vehicle industries. Sales of plastics and rubber products advanced 3.7 percent on widespread increases across the industry. Motor vehicle manufacturers reported a 1.5 percent increase in sales to $4.3 billion, the second consecutive monthly increase.
Sales fell in six provinces in March with most of the decreases reported by manufacturers in New Brunswick (-9.5 percent) and Saskatchewan (-7.7 percent). Sales of non-durable goods fell 13.2 percent in New Brunswick and 10.5 percent in Saskatchewan.
Partially offsetting these declines was a 30.7 percent increase in sales in Newfoundland and Labrador. There was very little change in the sales in other provinces.
Manufacturing inventories decreased 0.1 percent in March. A 1.6 percent drop in goods-in-process was largely responsible for the decline. This was mostly offset by increases of 0.3 percent in finished products and 0.7 percent in stocks of raw materials.
The largest drop in inventories occurred in aerospace product and parts where inventories fell 3.8 percent, driven by a decrease in goods-in-process. Non-metallic mineral product inventories fell 6 percent, reflecting a 27.4 percent drop in goods-in-process.
Lower inventories in those industries were largely offset by higher inventories in the petroleum and coal product (up 3.4 percent), and chemical manufacturing (up 2.8 percent) industries. In particular, the petroleum and coal product industry recorded a 10.2 percent rise in raw materials, while chemical producers reported a 4.1 percent increase in finished products.
Unfilled orders decreased 1.1 percent to $71.1 billion in March, following four consecutive months of gains. The drop in unfilled orders reflects lower unfilled orders in the aerospace product and parts, and fabricated metal product industries.
Unfilled orders of aerospace product and parts were 1.1 percent lower in March. The decrease largely reflects the appreciation of the Canadian dollar from February to March. Most of the industry's unfilled orders are held in U.S. dollars. Fabricated metal products' unfilled orders declined 3 percent in March. This drop was widespread across the industry as many of the largest establishments reported lower unfilled orders.