CA: Manufacturing Sales

Tue Apr 17 07:30:00 CDT 2018

Actual Previous Revised
Month over Month 1.9% -1.0% -1.3%
Year over Year 4.6% 2.9% 2.5%

February manufacturing sales beat expectations and increased a monthly 1.9 percent following two months of declines. The growth was spurred by higher transportation equipment sales. Sales were up in 14 of 21 industries, representing 72.2 percent of the total Canadian manufacturing sector. In constant Canadian dollars, sales rose 2.0 percent, slightly more than the gain in current dollar sales, reflecting a slight decrease in prices of products sold by Canadian manufacturers in February. On the year, sales were up 4.6 percent.

Transportation equipment sales were up 6.6 percent following a 6.3 percent decline in January. Growth was due a jump in motor vehicle (8.9 percent) and motor vehicle parts (4.8 percent) industries. These increases came on the heels of atypical assembly plant shutdowns in January. In constant dollars, sales volumes rose 9.3 percent in motor vehicle manufacturing and 4.8 percent in motor vehicle parts manufacturing in February.

Primary metal manufacturing industry rose 4.8 percent following two straight monthly decreases. The increase in February was primarily the result of increased volumes. In constant dollars, sales in this industry were up 4.6 percent. Paper manufacturing also climbed along with computer and electronic product manufacturing following declines the previous month. These increases were partially offset by a 2.1 percent decrease in the petroleum and coal products industry which was partly explained by the decrease in the price of refined products. After removing the effect of price changes, sales volumes of petroleum and coal products declined slightly by 0.7 percent in February.

Unfilled orders rose 3.0 percent for a second consecutive monthly gain. The growth in unfilled orders was largely driven by the aerospace product and parts, fabricated metal product and computer and electronic product manufacturing industries.

New orders rose 5.0 percent, the third consecutive monthly increase. The transportation equipment and fabricated metal product industries were largely responsible for the gain in new orders nationally.

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.