Canadian Manufacturing Sales Up 2.6% in September

Increase is third in three months; gain reflects higher sales in petroleum/coal products and transportation equipment.

Canadian manufacturing sales rose 2.6 percent to $49.2 billion in September, the third consecutive monthly increase. The gain in September largely reflected higher sales in the petroleum and coal products and transportation equipment industries, according to Statistics Canada.

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Constant dollar manufacturing sales were up 1.8 percent, the third monthly gain.

Higher sales were reported in 10 of 21 industries, representing 60.5 percent of total manufacturing.

By Sector
Sales of petroleum and coal products were up 13.7 percent to $7.6 billion in September. The increase was the largest in percentage terms since March 1999. The advance partly stemmed from higher volumes reported by some petroleum refineries following shutdowns for maintenance and expansion.

In the transportation equipment industry, sales rose 7.1 percent to $8.0 billion. The increase reflected gains in the aerospace product and parts, and motor vehicle industries. In the aerospace product and parts industry, production rose 17.0 percent to $1.6 billion, the highest level since July 2009. Sales in the motor vehicle industry advanced 6.2 percent to $3.8 billion in September as several plants returned to full production.

The increase in September was partly offset by a 3.0 percent decline in sales in the food industry. Decreases were widespread in the industry. Lower sales were also reported in the miscellaneous industry (-13.3 percent), stemming from a decline in jewellery and silverware manufacturing.

By Province
Stronger manufacturing sales were reported in nine provinces in September. The top contributors in dollar terms were Alberta, Quebec, New Brunswick and Ontario.

Manufacturers in Alberta reported a 5.9 percent rise in sales to $6.3 billion, the largest percentage increase since May 2008. Gains in September were focused in petroleum and coal products as well as in machinery industries.

Sales in Quebec increased 2.3 percent to $11.9 billion in September as advances were reported in 12 of 21 industries. Approximately three-quarters of the gain came from the aerospace product and parts industry, which reported a 25.0 percent increase in production to $1.0 billion.

Sales rose for the third consecutive month in New Brunswick, up 13.3 percent to $1.9 billion, reflecting substantial gains in the non-durable goods industries.

Manufacturers in Ontario reported a 1.0 percent increase in sales to $22.1 billion in September. This was the third monthly rise after a 1.1 percent decline in June. The largest gains occurred in the motor vehicle and petroleum and coal products industries. These gains were partly offset by declines in the miscellaneous and food industries.

Inventory
Inventory levels edged up 0.4 percent to $63.9 billion in September. Inventories have been trending upwards since the spring of 2010 and are at their highest level since March 2009. Gains were reported in 12 of 21 industries.

The main contributors to the rise in inventories in September were a 3.1 percent increase in the machinery industry and a 4.7 percent advance in the aerospace product and parts industry. The gains were partly offset by declines in the primary metal, paper, electrical equipment, and petroleum and coal product industries.

The inventory-to-sales ratio declined from 1.33 in August to 1.30 in September, the third consecutive decline. 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.

Unfilled Orders
Unfilled orders rose 3.0 percent to $62.0 billion in September, the ninth consecutive monthly advance. Unfilled orders were at their highest level since March 2009.

The aerospace product and parts (+3.0 percent) and the fabricated metal (+9.5 percent) industries led the gains. The increase in the aerospace product and parts industry largely reflected a decrease in the value of the Canadian dollar relative to the American dollar. A substantial portion of unfilled orders in the industry are held in American dollars.

New orders rose 4.8 percent to $51.0 billion in September. The gains in new orders were concentrated in the petroleum and coal products, aerospace product and parts, and fabricated metal product industries. They were partly offset by declines in the food and miscellaneous industries.

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