Canadian Manufacturing Sales Rise 1.6% in May - Modern Distribution Management

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Canadian Manufacturing Sales Rise 1.6% in May

Sales increases in Ontario drove most of the gains.

Canadian manufacturing sales rose 1.6 percent to C$51.6 billion (US$48 billion) in May, the fourth increase in five months, according to Statistics Canada. The gain was largely due to higher sales in the petroleum and coal product and motor vehicle industries.

Sales rose in 11 of 21 industries, representing about 61 percent of the manufacturing sector.

Constant dollar sales were also up 1.6 percent in May, indicating a rise in the volume of goods sold.

In the petroleum and coal product industry, sales increased 7.2 percent to C$7.4 billion (US$6.9 billion) in May. The gain reflected a return to more normal sales levels at several refineries following partial shutdowns in April for maintenance and retooling work.

Sales in the motor vehicle industry increased 9.3 percent to C$4.9 billion (US$4.6 billion), reaching the highest level since January 2012. Sales at some plants returned to normal levels after shutdowns for part of April.

Primary metal sales rose 2.4 percent to C$3.9 billion (US$3.6 billion) in May. A 2 percent decline in the food industry offset some of the gains in May.

Sales by Province
Manufacturing sales rose in six provinces in May, with almost two-thirds of the gain concentrated in Ontario.

In Ontario, sales rose 2.3 percent to C$24.1 billion (US$22.4 billion), the fourth consecutive increase for the province. With the latest advance, sales reached their highest level since July 2008, before the last recession. Most of the gain in May was caused by higher sales in the motor vehicle industry.

Sales in New Brunswick rose 15.8 percent to C$1.6 billion (US$1.5 billion), following six months of declines. Higher non-durable goods sales were the primary factor behind the gain.

The manufacturing sector in Alberta posted a 1.6 percent increase to C$6.7 billion (US$6.2 billion) in sales. The rise was the fifth consecutive monthly advance for the province. The gain in May stemmed from higher petroleum and coal product sales.

In Newfoundland and Labrador, sales declined 11.3 percent to C$488 million (US$454.1 million). Manufacturing sales in the province tend to be more volatile compared with other provinces. The decline reflected lower sales of non-durable goods.

Quebec manufacturing edged down 0.4 percent to C$11.8 billion (US$11 billion) in May. Declines in the food and paper industries were partly offset by higher primary metal sales.

Inventories & Unfilled Orders
Inventories declined 0.6 percent to C$71.9 billion (US$66.9 billion) in May, the first decline in five months. The decrease in May was largely a result of lower inventories held by petroleum and coal product manufacturers.

In the petroleum and coal product industry, inventories dropped 7.1 percent to C$6.9 billion (US$6.4 billion). Most of the decline reflected lower raw materials on hand at some plants.

Transportation equipment inventories declined 0.9 percent to C$12.8 billion (US$11.9 billion) in May. The decrease was caused by lower inventories in the motor vehicle as well as other transportation equipment industries.

Declines were partly offset by a 1.4 percent gain in primary metal inventories and a 1.5 percent increase in the chemical industry.

The inventory-to-sales ratio decreased from 1.42 in April to 1.39 in May, its lowest level since December 2013. The ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders were down 0.5 percent to C$89.3 billion (US$83.1 billion) in May as a result of a decline in the aerospace product and parts industry. Higher unfilled orders in the machinery and primary metal industries offset part of the decline.

New orders edged down 0.1 percent to C$51.2 billion (US$47.6 billion). Declines in the transportation equipment and food industries were largely offset by gains in the petroleum and coal product and primary metal industries.

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