| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | -1.8% | -1.5% | 0.0% | -0.2% |
| Year over Year | 9.3% | 12.8% | 11.0% |
Highlights
Canada's manufacturing sales contracted 1.5 percent in December, proving more resilient than expected. Forecasters in an Econoday survey had anticipated a 1.8 percent drop on the month. Sales were up 9.3 percent year-over-year.
Much of December's decline was price related, as volumes were down 0.3 percent from the previous month.
Leading indicators point to ongoing sales weakness, with new orders down 2.2 percent and unfilled orders down 1.2 percent.
The inventory-to-sales ratio rose to 1.71 in December from 1.68 in November.
Sales decreased in 14 of 21 industries in December, led by petroleum and coal, wood, food, and plastics and rubber industries.
The unadjusted capacity utilization rate decreased to 75.9 percent from 79.0 percent, suggesting price pressure could ease. Capacity utilization decreased for both durable and non-durable industries.
Over the fourth quarter, manufacturing sales rebounded 1.1 percent after declining 2.1 percent in the third quarter. For 2022 as a whole, manufacturing sales increased 17.9 percent, with a more modest 4.8 percent gain in volumes.
Today's stronger-than-expected report drove Econoday Consensus Divergence Index up to 11, pointing to a minor outperformance of the economy.
Much of December's decline was price related, as volumes were down 0.3 percent from the previous month.
Leading indicators point to ongoing sales weakness, with new orders down 2.2 percent and unfilled orders down 1.2 percent.
The inventory-to-sales ratio rose to 1.71 in December from 1.68 in November.
Sales decreased in 14 of 21 industries in December, led by petroleum and coal, wood, food, and plastics and rubber industries.
The unadjusted capacity utilization rate decreased to 75.9 percent from 79.0 percent, suggesting price pressure could ease. Capacity utilization decreased for both durable and non-durable industries.
Over the fourth quarter, manufacturing sales rebounded 1.1 percent after declining 2.1 percent in the third quarter. For 2022 as a whole, manufacturing sales increased 17.9 percent, with a more modest 4.8 percent gain in volumes.
Today's stronger-than-expected report drove Econoday Consensus Divergence Index up to 11, pointing to a minor outperformance of the economy.
Market Consensus Before Announcement
Manufacturing sales are expected to fall 1.8 percent in December after showing no change in November.
Definition
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).
Description
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.
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.
