Canadian Manufacturing Sales Down 0.4% in October - Modern Distribution Management

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Canadian Manufacturing Sales Down 0.4% in October

Sales of motor vehicles and other transportation equipment accounted for most of the decline.

Canadian manufacturing sales declined 0.4 percent to C$53.5 billion (US$41.7 billion) in October, following two consecutive monthly increases, according to Statistics Canada.

Sales fell in 8 of 21 industries, representing 56 percent of the manufacturing sector. Sales of motor vehicles and other transportation equipment accounted for most of the decline in October. Excluding these two industries, manufacturing sales increased 0.5 percent.

In constant dollars, sales decreased 1.5 percent in October, reflecting a lower volume of goods sold.

Transportation equipment sales declined 5 percent to C$9.7 billion (US$5.6 billion) in October, mostly due to lower sales of motor vehicle and other transportation equipment.

Sales in the motor vehicle industry fell 6.7 percent to C$4.6 billion (US$3.6 billion), the second consecutive monthly decrease. The decline partly reflected lower volumes generated by decreased production after shutdowns of some assembly plants in October. In constant dollars, sales volumes in the motor vehicle industry fell 7.6 percent.

Other transportation equipment sales were down 37.2 percent to C$248 million (US$193.3 million) in October. Sales in this industry are volatile compared with sales in the transportation equipment industry as a whole. In constant dollars, sales volume fell 37.9 percent.

Sales were also down in the chemical (-1.1 percent) and machinery (-1.4 percent) industries in October. The declines were widespread and reflected lower volumes of goods sold.

Lower sales in current dollars were partially offset by increases in petroleum and coal (+2.2 percent) and wood product (+3.4 percent) industries. After removing the effect of price changes, the volume of sales rose 1.1 percent and 1.9 percent respectively in these industries.

Sales decreased in six provinces in October, led by Ontario.

Sales in Ontario fell 2.2 percent to C$24 billion (US$18.7 billion), mainly attributable to declines in the motor vehicle (-7.7 percent), machinery (-3.6 percent) and food (-1.4 percent) industries.

Following three consecutive monthly increases, sales in Quebec declined 0.4 percent to C$13.2 billion (US$10.3 billion), mainly due to the petroleum and coal product and transportation equipment industries. These declines were partly offset by higher sales in the wood product and furniture and related product industries.

In Alberta, sales rose 4.2 percent to C$6 billion (US$4.7 billion), following a 1.4 percent decline in September. Sales were up in 10 of 21 industries, largely driven by higher sales in the petroleum and coal product (+14.7 percent) and, to a lesser extent, food and fabricated metal product industries.

In British Columbia, sales rose 2.1 percent to C$4.3 billion (US$3.4 billion) in October, the third straight monthly increase. Gains were observed in 17 of 21 industries, mainly driven by a 7 percent sales increase in the primary metals industry. Sales were also higher in the paper, wood product and petroleum and coal product industries.

Inventory levels increased 1.6 percent to C$74.8 billion (US$58.3 billion) in October, following two consecutive monthly declines. Inventories rose in 16 of 21 industries, with the largest gains in the transportation equipment (+2.8 percent), primary metals (+2.9 percent) and machinery (+2.1 percent) industries.

The inventory-to-sales ratio increased from 1.37 in September to 1.40 in October. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.


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