CA: Manufacturing Sales

Fri Mar 16 07:30:00 CDT 2018

Actual Previous
Month over Month -1.0% -0.3%
Year over Year 2.9% 3.7%

January manufacturing sales tumbled 1.0 percent and were up 2.9 percent from a year ago. Declines in the motor vehicles, aerospace product & parts along with the primary metal industries were responsible for the overall drop. Sales were down in 14 of 21 industries representing 56 percent of the Canadian manufacturing sector. Sales of durable goods declined 3.5 percent while sales of non-durable goods increased 1.7 percent. In constant dollars, manufacturing sales in volume terms declined 1.1 percent.

Motor vehicles fell 8.0 percent following two consecutive monthly increases. The decrease reflected lower production because of atypical assembly plant shutdowns. In constant dollar terms, sales in the motor vehicle industry declined 7.5 percent in January, indicating that the decline in current dollars is mainly due to a reduction in volumes produced.

Production in the aerospace product and parts industry decreased 9.5 percent following a 4.4 percent increase in December. The January decline was partly due to the increase in the value of the Canadian dollar relative to the U.S. dollar. Sales and inventories are used to calculate production in the aerospace industry and most inventories in the industry are held in U.S. dollars.

Sales in the primary metal industry were down 2.8 percent -- the second consecutive monthly decline. In constant dollars, sales in the primary metal industry were down 2.7 percent, indicating lower volumes of products were sold. Sales also declined in wood product (-4.1 percent), machinery (-3.1 percent) and paper (-4.0 percent) industries.

Partly offsetting these declines in current dollars were increases in the petroleum and coal product and the chemical industries. Sales in the petroleum and coal product industry were up 6.5 percent, the sixth gain in the last seven months and reflecting higher prices. After removing the effect of price changes, the volume of sales rose 2.2 percent in January. Chemical manufacturing sales rose 6.1 percent, reflecting higher volume sales among several chemical manufacturing industries, particularly the pesticide, fertilizer and the other agricultural chemical, as well as the pharmaceutical and medicine manufacturing industries. In constant dollars, sales in the chemical industry increased 6.1 percent in January.

Unfilled orders rose 0.6 percent following two months of declines. New orders rose for a second consecutive month, edging up 0.1 percent.

Manufacturing sales for twenty-one reporting industries are the Canadian dollar level of factory shipments for manufacturing durable and nondurable goods. Volume figures are also provided. The sales statistics form part of a wide monthly report that encompasses information on new orders, backlogs and inventories and is a key input into forecasts of monthly gross domestic product (GDP).

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.