The 2020 Mid-Year Economic Update_long

Canadian Manufacturing Sales Fall in November

Motor vehicle industry leads decreases in Canadian manufacturing.

Canadian manufacturing sales declined 0.8 percent in November to $44.9 billion, led by decreases in the motor vehicle and motor vehicle parts industries, according to Statistics Canada. Excluding the motor vehicle industries, manufacturing sales edged up 0.2 percent in November compared with October.

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Constant dollar manufacturing sales fell 1.4 percent in November. Constant dollar sales have been relatively stable over the past six months.

Higher sales were reported in 12 of 21 industries, representing 55.2 percent of total manufacturing.

By Industry
Sales in the transportation equipment industry fell 7.0 percent in November, led by declines in motor vehicle (-9.2 percent) and motor vehicle parts (-6.5 percent) manufacturing. Extended plant shutdowns due to retooling, as well as shift reductions, were key contributors to the lower sales in November.

Primary metal sales also declined, down 1.9 percent in November. Despite this decrease, primary metal sales have been strengthening throughout most of 2010. In November, sales were 22.9 percent higher compared with the same month a year earlier.

Outside of the transportation and primary metal industries, many manufacturers reported gains compared with October. Computer and electronic product sales led the gains, rising 5.1 percent in November. Food manufacturing (+0.7 percent), as well as beverage and tobacco product sales (+2.9 percent), rose for the first time in four months.

Petroleum and coal product sales advanced 1.0 percent in November, the fifth consecutive increase. Rising prices rather than increasing volumes have been behind much of the recent gains.

By Province
In November, seven provinces reported sales gains. However, these advances were more than offset by declines in New Brunswick, Alberta, and in particular, Ontario. Excluding Ontario, manufacturing sales rose 0.6 percent in November compared with October.

Sales in Ontario decreased 2.3 percent in November. The transportation equipment industry was behind most of the drop, with sales falling 7.5 percent or by $420 million. Primary metal sales also fell in Ontario, losing 7.7 percent or $115 million.

New Brunswick (-4.9 percent) and Alberta (-1.6 percent) also reported lower sales. Non-durable goods industries such as food, and petroleum and coal products were behind much of the decline in both provinces.

Manitoba led the provincial sales advances in November, increasing 7.6 percent following a 6.1 percent drop in October. Sales in the transportation equipment and primary metal industries were key contributors to the increase.

Sales in Quebec edged up 0.2 percent in November, despite a 13.4 percent drop in the transportation equipment industry. Gains by computers and electronics (+18.5 percent), non-metallic minerals (+7.8 percent), and petroleum and coal (+7.2 percent) manufacturers helped to offset the drop in transportation equipment sales.

Inventory Levels
Inventory levels increased 1.3 percent in November to $61.1 billion. Inventories have been on the rise since May 2010. In 2009, inventories were reduced, with most of the decrease coming in the first half of the year.

The rise in November reflected a 10.8 percent increase in the petroleum and coal product industry, mainly as a result of large deliveries of raw materials during the month. Both price and volume increases were factors in the advance.

Primary metal inventories rose 2.4 percent during the month. Inventories in this industry have risen for eight consecutive months.

These increases were partially offset by a 1.4 percent decline in the chemical products industry. Most of this inventory decline was focused in the pharmaceutical industry.

The inventory-to-sales ratio for November increased three points to 1.36. This was the highest level since February 2010. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled Orders
Unfilled orders advanced 0.5 percent to $52.7 billion in November, the first increase in three months. Unfilled orders have remained relatively stable in 2010 after declining throughout most of 2009.

The increase in orders was mostly concentrated in the fabricated metal and primary metal industries. The backlog of orders in these industries rose 5.2 percent and 15.5 percent respectively.

The largest decrease in unfilled orders came in the transportation equipment industry, which was down 0.7 percent in November compared with October.

New orders advanced 1.6 percent in November compared with October, the third increase in four months. New orders rose largely on the strength of the aerospace products and parts industry. Excluding aerospace products and parts, new orders fell 1.4 percent in November.

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