Canadian Manufacturing Sales Up 3.4% in November - Modern Distribution Management

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Canadian Manufacturing Sales Up 3.4% in November

Higher sales in transportation equipment, petroleum and coal product accounted for most of the increase.

Canadian manufacturing sales rose 3.4 percent to a record high C$55.5 billion (US$44.6 billion) in November, mainly due to higher sales in the transportation equipment, petroleum and coal product and chemical industries, according to Statistics Canada.

Overall, 12 of 21 industries, representing 81 percent of the manufacturing sector, posted increases in November.

Higher petroleum prices contributed to the overall increase in manufacturing sales. Once the effects of these and other price changes are removed, manufacturing sales volumes rose 2.5 percent in November.

Sales of transportation equipment increased 9.1 percent to C$10.6 billion (US$8.5 billion) in November, following two consecutive monthly decreases. Most of the increase in November was attributable to higher sales in the motor vehicle assembly (+14.2 percent) and motor vehicle parts (+11.3 percent) industries, reflecting increased production after motor vehicle assembly plant shutdowns in October. In constant dollars, sales volumes rose 14.7 percent in the motor vehicle assembly industry and 10.9 percent in the motor vehicle parts industry in November.

In the petroleum and coal product industry, sales rose for the fifth straight month, up 6.1 percent to C$6 billion (US$4.8 billion) in November, primarily due to higher prices. After removing the effect of price changes, sales volumes decreased 0.3 percent in November.

Chemical industry sales rose 5.9 percent to C$4.4 billion (US$3.5 billion) in November, after declining 2.7 percent in the previous month. The increases in this industry were widespread and were most pronounced in the basic chemical industry, as well as in the pharmaceutical and medicine industry.

Sales also increased in the food (+2.1 percent), fabricated metal product (+3 percent) and paper (+2.8 percent) industries.

Higher sales in current dollars were partially offset by decreases in the computer and electronic product (-2.5 percent) and machinery (-0.6 percent) industries.

Sales were up in nine provinces in November, with most of the gain in Ontario.

Following two consecutive months of declines, sales in Ontario increased 5.8 percent in November to C$25.4 billion (US$20.4 billion). Higher sales in the transportation equipment industry (+12.7 percent) were responsible for two-thirds of the provincial increase. Sales were also up in the petroleum and coal product (+14.9 percent) and chemical (+8.6 percent) industries. A 1.7 percent decline in the machinery industry offset some of these gains.

In Quebec, sales rose 1.2 percent to C$13.4 billion (US$10.8 billion), following a 0.4 percent decline in October. Sales were up in 9 of 21 industries, led by the petroleum and coal product (+8.5 percent), primary metal (+3.3 percent) and food (+1.7 percent) industries. These gains were partly offset by lower sales in the aerospace product and parts (-4.5 percent) and machinery (-3.8 percent) industries.

The lone provincial decrease was in Manitoba, where sales were down 1 percent to C$1.5 billion (US$1.2 billion) in November. This was the second consecutive monthly decline and was largely due to lower sales of durable goods. However, sales for January to November were 4.9 percent higher compared with the same period in 2016.

Inventory levels rose for the second consecutive month, up 0.9 percent to C$75.4 billion (US$60.6 billion) in November. Inventories were up in 12 of 21 industries, led by the transportation equipment (+1.6 percent) and petroleum and coal product (+4.4 percent) industries.

The inventory-to-sales ratio fell from 1.39 in October to 1.36 in November, because the increase in sales was much larger than the increase of the inventories. 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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