Canadian manufacturing sales advanced 0.6 percent to C$49.9 billion in December, according to Statistics Canada. This is the fifth increase in six months. The transportation equipment industry led the gain.

Sales increased in 12 of 21 industries representing about two-thirds of Canadian manufacturing. The gains occurred primarily in durable goods industries, where sales rose 2.1 percent. Sales of non-durable goods fell 0.9 percent.

In terms of constant dollars, manufacturing sales rose 1.2 percent, representing an increase in the volume of manufactured goods. This was the fifth increase in constant dollar sales in six months.

With December’s increase, monthly sales for 7 of 21 manufacturing industries have reached or surpassed levels recorded in October 2008, the onset of the recent economic downturn. The largest of the seven industries includes transportation equipment, food, petroleum and coal products, and machinery manufacturing. Combined, these four represented 51 percent of total manufacturing in December.

December’s sales, at C$49.9 billion, were just short of the pre-downturn total of C$50.2 billion in October 2008.

For 2011 as a whole, manufacturing sales amounted to C$571 billion, up 7.8 percent from 2010. The main contributors to the annual increase included higher sales in the petroleum and coal products, primary metal, machinery and transportation equipment industries.

By Industry
Sales by motor vehicle manufacturers advanced 2.9 percent in December to C$4.3 billion, the highest monthly sales level since November 2007. In addition, sales in the motor vehicle parts industry rose 5.5 percent to C$1.9 billion. The transportation equipment industry as a whole had the largest dollar gains of any industry, with a 3.7 percent increase in sales to C$8.5 billion. This was the seventh consecutive monthly increase.

Plastics and rubber products sales increased 7.5 percent to C$2.1 billion, their highest level since August 2007. The rise reflected higher sales volumes.

Greater sales volumes were entirely responsible for a 2.7 percent increase in the primary metal industry to C$4.2 billion, the third consecutive monthly gain.

The overall sales increase was partly offset by a 5.6 percent decline among petroleum and coal product manufacturers to C$6.9 billion. A portion of the decrease was the result of a 3.7 percent decline in prices for petroleum and coal products, as measured by the Industrial Product Price Index.

By Province
Manufacturing sales rose in four provinces in December. Most of the sales increase was located in Central Canada. Combined sales in Ontario and Quebec were up C$741 million while sales declined C$445 million in the rest of Canada. With the gains in December, Ontario, Alberta, Newfoundland and Labrador, and Saskatchewan surpassed their sales levels recorded in October 2008.

In Ontario, sales rose 2.1 percent to C$22.9 billion, the third consecutive monthly increase and the highest level since September 2008. The increase was largely the result of a 6.5 percent advance in the primary metal industry, a 5.5 percent gain in the motor vehicle parts industry, and a 2.3 percent rise in the motor vehicle industry. Gains in the machinery and miscellaneous manufacturing industries also contributed to Ontario’s sales for December. A decline in production in the aerospace product and parts industry offset a portion of the provincial increase.

Sales in Quebec rose 2.3 percent to C$12.0 billion, the fourth increase in five months. A 17.9 percent increase in the transportation equipment industry was behind a large portion of the provincial growth. The plastics and rubber products, machinery, and primary metal industries also recorded sales increases. A 13.5 percent decline in sales reported by petroleum and coal products manufacturers partly offset the gains in Quebec.

In Alberta, sales declined 3.5 percent to C$6.3 billion, mostly as a result of lower sales in the machinery industry. After a sales peak in November, the machinery industry declined 23.4 percent to C$776 million.

Sales fell 4.8 percent in New Brunswick and 10.0 percent in Newfoundland and Labrador, reflecting declines reported in the non-durable goods industries.

Inventories
Inventory levels decreased 0.9 percent in December to C$64.4 billion, the first decline after 14 months of increases. Inventories declined in 14 of 21 industries, with non-durable goods down 0.7 percent and durable goods down 1.0 percent.

Primary metal inventories declined 2.0 percent to C$7.7 billion. In the food industry, inventories decreased 2.3 percent, owing in part to lower stocks in the grain and oilseed milling industry.

The declines were partially offset by higher inventory levels reported by motor vehicle, fabricated metal product, and chemical manufacturers.

The inventory-to-sales ratio fell to 1.29 in December from 1.31 in November. 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 declined 1.6 percent to C$60.8 billion in December. The decrease was largely the result of declines in the transportation equipment (-1.3 percent) and the primary metal (-8.7 percent) industries.

In the transportation equipment industry, unfilled orders were down 1.0 percent for aerospace product and parts and 2.4 percent for railroad rolling stock.

New orders
New orders decreased 2.8 percent in December to C$49.0 billion, following a 4.2 percent gain in November. The decline in new orders was concentrated in the aerospace product and parts industry.