CA: Manufacturing Sales

January 19, 2017 07:30 CST

Consensus Actual Previous
Month over Month 1.5% 1.5% -0.8%
Year over Year 2.1% 1.9%

Manufacturing sales in November rebounded 1.5 percent from October's 0.6 percent decline. On the year, sales were up 2.1 percent after increasing 1.9 percent the month before. The monthly increase was mainly the result of higher sales in the primary metal, petroleum & coal product and chemical manufacturing industries. Sales were up in 14 of the 21 industries, representing 68 percent of Canadian manufacturing sales. Sales in volume terms were up 1.2 percent.

Primary metal manufacturing sales rose 9.1 percent following two months of decline. The sales increase was widespread among all five primary metal manufacturing industries. However, the non-ferrous metal production & processing and the iron & steel pipes & tubes manufacturing industries posted the largest sales gain in dollars in November. Petroleum & coal product sales increased 3.7 percent to their highest level since September 2015. The gain in November was mainly attributable to higher volumes reported by several oil refineries following partial shutdowns in September and October for maintenance and retooling work.

However, sales in the transportation equipment industry decreased 2.3 percent mainly thanks to decreases in the aerospace product & parts industry (down 7.4 percent) and the other transportation equipment industry (down 26.8 percent), which had posted a significant increase the previous month.

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.