Canadian Manufacturing Sales Edge Down in August - Modern Distribution Management

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Canadian Manufacturing Sales Edge Down in August

Declines in miscellaneous, food and motor vehicle assembly industries largely offset by gains in aerospace product and parts and primary metal industries.
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Manufacturing sales in Canada edged down 0.2 percent to C$49.5 billion (US$47.9 billion) in August, following three months of gains, according to the latest report from Statistics Canada. Sales were down in the miscellaneous, food and motor vehicle assembly industries. However, these declines were largely offset by gains in the aerospace product and parts and primary metal industries.

Sales were down in 11 of 21 industries, representing just over 40 percent of manufacturing sales.

Non-durable goods sales declined 0.7 percent to C$24.6 billion (US$23.8 billion) while durable goods sales rose 0.4 percent to C$24.9 billion (US$24.1 billion). Constant dollar sales fell 0.3 percent, indicating a slight decrease in volumes.

Sales by Industry
Sales fell 22.6 percent to C$858 million (US$829.4 million) in the miscellaneous manufacturing industry, more than reversing a 19.8 percent gain in July. Sales in this industry have been volatile over the past several months.

In the food industry, sales were down 1.6 percent to C$7.1 billion (US$6.9 billion). The largest decline was in the grain and oilseed milling sub-industry, as some facilities shutdown for part of August for maintenance work.

Motor vehicle assembly sales were down 2.5 percent to C$4.4 billion (US$4.3 billion). The decrease reflects smaller than usual gains in August following regular plant maintenance shutdowns in July.

The sales declines were largely offset by gains in the aerospace product and parts and primary metal industries. Aerospace production rose 17.8 percent to C$1.5 billion in August (US$1.5 billion), following a 17.1 percent decline in July.

In the primary metal industry, sales rose 3 percent to C$3.6 billion (US$3.5 billion). Most of the gain reflected higher volumes of product sold.

Sales by Province
Sales were down in five provinces in August, with the largest decline in Ontario where sales fell 2.1 percent to C$22.5 billion (US$21.8 billion). Almost 40 percent of the provincial decline was due to a 28.4 percent drop in the miscellaneous manufacturing industry. Sales also declined in the motor vehicle assembly, chemical, machinery and food industries.

Sales in Saskatchewan decreased 6 percent to C$1.2 billion (US$1.2 billion), mostly as a result of a 14.2 percent drop in the food industry and a 12.8 percent decline in the chemical industry.

Quebec manufacturers reported a 3.2 percent gain to C$11.6 billion (US$11.2 billion), the third consecutive monthly increase. Prior to the recent advance, sales had declined in 10 of 12 months. Most of the gain in August was caused by an increase in production in the aerospace product and parts industry. Sales were also up in the petroleum and coal product as well as the primary metal industries.

In Alberta, sales rose 1.9 percent to C$6.5 billion (US$6.3 billion). Large gains were posted by the machinery, the petroleum and coal product as well as the fabricated metal product industries.

Inventories & Unfilled Orders

Inventories edged up 0.3 percent to C$68.9 billion (US$66.6 billion) in August. Inventories have been moving upwards since the spring of 2010.

In the petroleum and coal product industry, inventories were up 5.3 percent to C$6.3 billion (US$6.1 billion). The gain stemmed from higher goods-in-process and finished product inventories on hand at a number of refineries.

Inventories rose 3.3 percent to C$7.5 billion (US$7.3 billion) in the aerospace product and parts industry. The gain largely reflected higher levels of goods-in-process.

These gains were partly offset by a 2 percent decrease in inventories in the primary metal industry and a 1.4 percent decline in the machinery industry.

The inventory-to-sales ratio remained at 1.39 in August. 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 rose 0.4 percent to C$73.9 billion (US$71.4 billion) in August, the ninth increase in 10 months. The gain in August was largely attributable to higher unfilled orders in the aerospace product and parts industry. Declines in the machinery and fabricated metal product industries offset much of the gain in the aerospace industry.

New orders edged up 0.1 percent to C$49.8 billion (US$48.1 billion). A large gain in the aerospace product and parts industry was mostly offset by declines in the machinery, motor vehicle assembly and miscellaneous industries.

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