CA: Manufacturing Sales

Mon Jun 15 07:30:00 CDT 2015

Consensus Actual Previous Revised
Month over Month -0.5% -2.1% 2.9% 2.7%
Year over Year -2.3% 0.3% -0.1%

Following their surprise surge in March (revised down to 2.7 percent) manufacturing sales fell a much steeper than expected 2.1 percent on the month in April. Compared with a year ago shipments were 2.3 percent weaker after a 0.1 percent decline last time.

Volumes, which were also exceptionally robust at quarter-end, fell a smaller 1.0 percent from March and were flat versus April 2014.

Within the monthly drop in total nominal sales, food was down some 5.7 percent and petroleum and coal products 2.7 percent. Primary metals decreased 1.3 percent and transport equipment nosedived 4.5 percent on the back of a near-18 percent slide in aerospace products and parts. Miscellaneous manufacturing lost 5.1 percent. On the positive side chemicals were up 1.2 percent and plastics and rubber 1.7 percent. Electrical equipment, appliances and components (1.4 percent) also had a good month.

Elsewhere the survey was decidedly downbeat. Hence, new orders slumped a monthly 5.6 percent and backlogs were off 2.0 percent. At the same time, inventories expanded 0.8 percent which was enough to see the inventory/sales ratio jump 0.04 months to 1.45 months, a 0.03 month rise from a year ago.

The limited data available so far had suggested a decent rebound in real GDP this quarter. However, today's survey results warn that April was not a good period for manufacturing so growth at the start of the quarter will have to have been generated elsewhere.

Manufacturing sales are the Canadian dollar level of factory shipments for manufacturing durable and nondurable goods.

Manufacturer's shipments represent the monetary level of factory shipments for durable and nondurable goods and are a relevant indicator for an export-oriented economy. The data are used by analysts to evaluate the economic health of manufacturing industries. They are also used as inputs to GDP and needless to say, these data are used by the central bank in its decision-making process.

The monthly survey of manufacturing of which shipments is a part, provides a broad look at manufacturing activity levels. The level of activity in manufacturing can be affected by the level of interest rates which slows or stimulates the demand for goods and production. Shipments are an indication of how busy factories have been as manufacturers work to fill orders. The data not only provide insight to demand for items such as refrigerators and cars, but also business investment such as industrial machinery, electrical machinery and computers. Because a large proportion of shipments are headed south of the border to the U.S. and include a wide variety of durables, shipments are affected by U.S. economic activity as well as the exchange rate. Although the focus in this report is on shipments, it also contains information on inventories and new and unfilled orders.

Results from this survey are used by both the private and public sectors including finance departments of the federal and provincial governments, the Bank of Canada, Industry Canada, the System of National Accounts, the manufacturing community, consultants and research organizations in Canada, the United States and abroad.