CA: Manufacturing Sales

Thu Nov 16 07:30:00 CST 2017

Consensus Actual Previous
Month over Month -0.5% 0.5% 1.6%
Year over Year 4.6% 4.3%

September manufacturing sales surprised and increased a monthly 0.5 percent in contrast to expectations of a 0.5 percent decline. The increase reflected higher sales in the petroleum and coal product industry. Overall, sales were up in 7 of 21 industries, representing 28.9 percent of the Canadian manufacturing sector. Sales of non-durable goods rose 1.7 percent while sales of durable goods decreased 0.5 percent. In constant dollars, sales increased 0.7 percent, indicating that higher volumes of manufactured goods were sold in September. On the year, sales were up 4.6 percent.

Petroleum & coal products jumped 10.3 percent for the third consecutive monthly gain. The increase reflected gains in prices and volumes for petroleum and coal product. After removing the effect of price changes, sales in volume terms increased 6.7 percent in September. Machinery (+1.9 percent) and paper (+1.0 percent) industries also increased with sales in constant dollars increasing 2.1 percent and 1.4 percent, respectively, indicating that higher volumes of goods sold were responsible for the gains.

Partially offsetting these increases in current dollars were declines in the food and transportation equipment industries. Sales in the food industry were down 1.0 percent. After removing price effects, sales volumes of the food industry declined 0.4 percent in September.

Transportation equipment declined 0.7 percent, although increases in the railroad rolling stock industry, other transportation equipment and aerospace product & parts were posted in September. These gains were not sufficient to offset decreases in the motor vehicle (-5.9 percent) and motor vehicle parts (-2.5 percent) industries. After removing price effects, volumes sold declined by 4.5 percent and 1.2 percent respectively in these industries, following strong volumes in August.

Unfilled orders declined 1.1 percent while new orders decreased 1.7 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.