CA: Manufacturing Sales

Fri Feb 16 07:30:00 CST 2018

Actual Previous
Month over Month -0.3% 3.4%
Year over Year 3.7% 6.0%

December manufacturing sales declined a monthly 0.3 percent after soaring a revised 3.8 percent in November. The decline was mainly the result of lower sales in the petroleum and coal products industry and the food manufacturing industry. Overall, sales were down in 11 of 21 industries, representing 57.0 percent of the manufacturing sector. Sales of non-durable goods decreased 1.3 percent, while sales of durable goods rose 0.7 percent. Once the effects of price changes are taken into account, manufacturing sales in volume terms edged down 0.1 percent in December. Sales were down in seven provinces in December. New Brunswick and Quebec reported the largest declines, which were partly offset by higher sales in Ontario and Alberta.

Following five consecutive monthly increases, sales in the petroleum and coal product industry fell 4.1 percent, mostly reflecting lower volumes. After removing price effects, sales volumes of petroleum and coal products were down 3.5 percent. Sales in the food industry were down 2.6 percent following a 3.6 percent increase in November, which was the largest monthly increase in dollars since October 2013. The declines in the food industry were most pronounced in the meat product industry as well as in the dairy product industry.

Inventory levels edged up 0.1 percent from November. Inventories rose in 8 of the 21 industries, led by the petroleum and coal products (4.9 percent) and the other transportation equipment (10.4 percent) industries. These gains were partially offset by lower inventories in the railroad rolling stock industry and fabricated metal product industry. The inventory-to-sales ratio rose from 1.35 in November to 1.36 in December. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders fell 0.7 percent for a second consecutive monthly decline. The decrease in December was mainly due to a drop in unfilled orders in the aerospace product and parts industry, as well as the other transportation equipment industry. New orders were up 0.3 percent following a 2.3 percent decline in November.

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.