Canadian Manufacturing Sales Down 1.7 percent in February

Drop attributable to lower sales of motor vehicles and reduced production of aerospace products and parts.

Canadian manufacturing sales decreased 1.7 percent to C$50 billion (US$40.3 billion) in February, the fourth decrease in five months. The decrease follows a 3 percent decline in January.

The drop reflected lower sales of motor vehicles and reduced production of aerospace products and parts. Monthly manufacturing sales have fallen 6.8 percent since their most recent high of $53.7 billion (US$43.3 billion) in July 2014. Constant dollar sales rose 2.3 percent, indicating that a higher volume of products was sold.

Sales fell in 10 of 21 industries representing just over half of all Canadian manufacturing.

Sales of motor vehicles fell 14.9 percent to $4.2 billion (US$3.4 billion), the lowest level since December 2012, largely due to closures for retooling at assembly plants in Ontario. Production of aerospace products and parts declined 25.7 percent in February.

Partially offsetting these declines were increases in the chemical as well as the petroleum and coal products industries. Chemical product sales rose 8.2 percent, reflecting increased volumes in February as well as higher prices. Petroleum and coal product sales rose 5.7 percent, following seven months of declines, due to an 8.7 percent increase in prices in the industry. The volume of petroleum and coal products sold declined in February.

Although national manufacturing sales fell 1.7 percent in February, only Ontario, Quebec and Nova Scotia reported lower sales. In Ontario, sales declined 2.8 percent to $23.1 billion (US$18.6 billion), the lowest level since January 2014, mainly due to a 15.7 percent drop in motor vehicle sales and a 3.4 percent decrease in sales of motor vehicle parts.

Sales in Quebec fell 5.3 percent, the largest monthly decline in the province since April 2013, with production in the aerospace product and parts industry decreasing 44 percent and sales of primary metals decreasing 4.4 percent. Sales in Nova Scotia were 0.8 percent lower, reflecting declines in the paper, non-metallic mineral product and food industries.

Inventories rose 0.9 percent in February to $72.2 billion (US$58.2 billion), the highest level since the current series began in 1992. The increase reflected higher inventories held in the motor vehicle and food industries.

Partially offsetting these gains was a 1.4 percent decline in inventories in the petroleum and coal product industry. This was the eighth consecutive month of lower inventories, with inventory levels falling 34.1 percent over this period, largely as a result of lower prices. However, the decline in February was volume based as prices in the industry rose.

The inventory-to-sales ratio rose from 1.41 in January to 1.44 in February. 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.

Unfilled orders fell 1.2 percent in February to $99.1 billion (US$80 billion), reflecting lower unfilled orders in the aerospace product and parts industry and the other transportation equipment industry. Partially offsetting the declines was a 4.9 percent increase in unfilled orders in the electric equipment, appliance and component product industry.

New orders fell 17.7 percent in February, reflecting a drop in new orders in the transportation equipment industry.

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