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In The News:

Canadian Manufacturing Sales Fall in November

Source: Statistics Canada

Canadian manufacturing sales decreased for a fourth consecutive month in November. Sales fell 6.4% to $48.4 billion, the lowest level since December 2004.

Constant dollar manufacturing sales, which are measured in 2002 prices, fell to their lowest level in almost 10 years, decreasing by 3.0% in November. Therefore, about half of the drop in the current dollar series compared with October reflected price declines. The most significant price decreases were in the petroleum and coal industry (-18.5%) and primary metal industry (-6%).

At the industry level, sales in 12 of 21 manufacturing industries decreased in November, accounting for over four-fifths of total sales.

By Sector
November sales were down in the five largest industries, led by a 20.6% drop by petroleum and coal product manufacturers. Petroleum and coal product sales have fallen for five consecutive months. Sales have decreased by almost $3 billion compared with the peak of $8.2 billion reached in June 2008. Falling prices were the most significant factor in explaining the lower value of sales in November.

Primary metal manufacturers also reported significantly lower sales, down 17.4% to $4.1 billion. Sales in November were at the lowest level since March 2006, as both falling prices and deteriorating global demand negatively influenced the value of sales.

Sales in the transportation equipment industry decreased 3.9% in November. Aerospace products and parts production pulled back 22.5%, after a 27.2% gain in October. This was the first production decrease in the aerospace industry since August.

In November, chemical product manufacturers posted an 8.7% drop in sales, which was largely due to the resin, synthetic rubber, and artificial and synthetic fibres and filaments industry.

By Province
Every province reported decreased manufacturing sales in November, ranging from a 0.3% decline in Saskatchewan to a 31.5% drop in New Brunswick. In the Atlantic provinces as a whole, manufacturing sales were down 21.7%, reflecting a sizeable decline in petroleum product prices.

Manufacturing sales fell by 7.6% in Quebec, erasing the 3.6% rise in October. The drop in sales for November was mainly due to declines in the primary metal and aerospace manufacturing industries.

Ontario's manufacturing sales declined 3.9%, the fourth consecutive monthly decrease. Petroleum and coal product sales fell by 20.1%, reflecting the drop in petroleum prices. Primary metal manufacturing for the province declined by 16.2% compared with October.

The decline in Alberta's manufacturing sales steepened in November. Sales fell 8.8%, following a 6.2% drop in October. The chemical product industry (-31.7%) was the leading cause of decreased provincial sales. In addition, petroleum and coal products sales fell by 15.2%.

Sales in British Columbia decreased by 3.6%, primarily due to declines in the wood and paper product industries.

Inventory
Inventory levels pulled back 0.6% in November to $68.3 billion, the second decrease in nine months.

Petroleum and coal product inventories declined 9.8%, and primary metal manufacturers reported a 2.7% drop. Price decreases were a significant factor in the lower value of inventory in both cases. Offsetting these declines were increases of 4.6% in computers and electronics and 2.5% in aerospace products and parts.

The inventory-to-sales ratio increased to 1.41 in November, the highest level since January 2002. This eight-point jump was the largest month-to-month gain

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