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Canadian manufacturing sales increased for the third consecutive month, up 1.1 percent to C$54.6 billion (US$43.4 billion) in May. The gain was mainly due to higher sales in the transportation equipment and chemical manufacturing industries.
Sales were up in 16 of 21 industries, representing 71 percent of the manufacturing sector. Sales of durable goods rose 2.2 percent, while sales of non-durable goods declined 0.3 percent.
In constant dollars, sales were up 1.1 percent, indicating that higher volumes of manufactured goods were sold in May.
Sales in the transportation equipment industry rose 4.2 percent to C$11.5 billion (US$9.1 billion) in May, the third gain in four months. The growth was the result of increases in the motor vehicle (+8.6 percent) and the motor vehicle parts (+5.7 percent) industries, mainly reflecting higher volumes. After removing the effect of price changes, sales in volume terms rose 8.1 percent and 5 percent respectively in these industries in May.
Chemical manufacturing sales increased 2.4 percent to C$4.4 billion (US$3.5 billion), following three months of declines. The gain was widespread among all seven chemical manufacturing industries. However, the pesticide, fertilizer and the other agricultural chemical manufacturing industries posted the largest sales increase. Generally, sales spike in these industries once seeding in the agricultural sector has taken place.
In constant dollars, sales in the chemical industry were up 1.5 percent, indicating higher volumes of chemical products were sold.
These increases were partially offset by a 3.4 percent decline in the petroleum and coal product industry to C$5 billion (US$4 billion), mostly reflecting lower prices. After removing the effect of price changes, sales volumes of petroleum and coal products rose 0.7 percent in May.
Sales increased in six provinces in May, led by Ontario.
Sales in Ontario increased 2.6 percent to C$26.3 billion (US$20.9 billion) in May, their highest value on record. Growth in May was largely attributable to the motor vehicle (+8.7 percent) and motor vehicle parts (+5.8 percent) industries. These increases were partially offset by lower petroleum and coal product sales (-6.6 percent).
In Alberta, sales rose 1.3 percent to C$6.1 billion (US$4.9 billion), the seventh consecutive monthly increase. Sales were up in 11 of 21 industries, largely driven by gains in the chemical (+8.9 percent) industry and, to a lesser extent, the machinery industry.
Sales in Quebec fell 1.8 percent to C$12.7 billion (US$10.1 billion) in May, following a 2.3 percent increase in April. The decline was mostly attributable to lower production in the aerospace product and parts industry and lower sales in the food industry. These decreases were partly offset by higher sales in the paper, wood product, and plastics and rubber products industries.
Manufacturing inventory levels edged down 0.2 percent to C$73.7 billion (US$58.5 billion) in May, following five months of gains.
Inventories fell in 8 of the 21 industries, with the aerospace products and parts (-2.6 percent) and the chemical (-2 percent) industries recording the largest declines. These decreases were partially offset by a 1.8 percent increase in primary metal inventories.
The inventory-to-sales ratio declined from 1.37 in April to 1.35 in May. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.