The 2020 Mid-Year Economic Update_long

Canadian Manufacturing Sales Down 3.3 percent in August

First decline of 2014 reverses gains for June and July.

Canadian manufacturing sales decreased 3.3 percent to C$52.1 billion (US$46.2 billion) in August, the first decline in 2014. The decrease mostly reversed the gains recorded for June and July.

In August, about half of the decrease was caused by lower sales of motor vehicles and motor vehicle parts. Excluding motor vehicles and parts, sales declined 1.9 percent. Overall, 16 of 21 industries representing about 81 percent of the manufacturing sector posted declines.

Constant dollar sales decreased 3.7 percent in August, indicating a lower volume of products was sold.

Transportation equipment sales fell 12.8 percent to C$8.9 billion (US$7.9 billion) in August, mostly as a result of lower sales of motor vehicles and motor vehicle parts.

In the motor vehicle industry, sales decreased 12 percent to C$4.5 billion (US$4 billion). The decline followed stronger than usual sales in July (+13.7 percent). Unadjusted sales in August, on a year-to-date basis, were 3.5 percent higher than the same period last year.

Sales in the motor vehicle parts industry were down 10.8 percent to C$2 billion (US$1.8 billion) in August. The decline was the second in eight months.

Other transportation equipment sales were down 40.6 percent to C$274 million (US$243 million) in August, giving back most of the 43.6 percent gain in July. Sales in this industry are volatile compared with sales for the transportation equipment industry as a whole.

Petroleum and coal product sales declined 3.4 percent to C$7.3 billion (US$6.5 billion), mostly as a result of lower volumes of product sold.

Sales were down in seven provinces in August, with the bulk of the decrease concentrated in Ontario.

Manufacturing sales in Ontario declined 4.6 percent to C$23.9 billion (US$21.2 billion), essentially reversing the 4.8 percent advance in July. Declines in the transportation equipment industry were the main cause of the sales drop in the province in August. In particular, sales in the motor vehicle (-12.4 percent), motor vehicle parts (-11.1 percent) and aerospace product and parts (-28.5 percent) industries were lower.

The manufacturing sector in Quebec declined 1.6 percent to C$12.1 billion (US$10.7 billion) in August, following three months of gains. The transportation equipment and the petroleum and coal product industries were the main contributors to the decrease.

Manufacturing sales in Alberta decreased 2.8 percent to C$6.7 billion (US$5.9 billion). Lower sales in the petroleum and coal product and chemical industries were the main source of the decline.

Sales in Manitoba declined 9.9 percent to C$1.3 billion in August, following a 14.3 percent gain in July. The decrease was largely attributable to lower sales in the primary metal and transportation equipment industries.

Total inventories decreased 0.6 percent to C$71.3 billion (US$1.2 billion) in August, the second decline in eight months. The decrease was caused primarily by lower inventories in the petroleum and coal product industry, which declined 8.6 percent to C$7 billion (US$6.2 billion). Most of the decrease stemmed from lower raw materials held at petroleum refineries. Higher inventories in the primary metal industry offset some of the decline.

Unfilled orders edged down 0.1 percent to C$89.2 billion (US$79.1 billion) in August. Total unfilled orders have been relatively stable over the past six months, after rising 15.3 percent in February 2014. In August, lower unfilled orders in the primary metal (-6.2 percent) and machinery (-1.4 percent) industries were mostly offset by a 0.3 percent gain in the transportation equipment industry.

New orders were down 3.8 percent to C$52 billion (US$46.1 billion) in August. About half of the decline was attributable to a decrease in the transportation equipment industry. New orders were also down in the petroleum and coal product, primary metal, machinery, and the computer and electronic product industries.

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