| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | -2.8% | -2.8% to -2.5% | -3.6% | 4.1% | 4.5% |
| Year over Year | 3.8% | 13.3% | 13.7% |
Highlights
Canada's manufacturing sales were weaker than expected in February, when they contracted 3.6 percent from January, while Econoday's consensus had centered around a 2.8 percent drop. Manufacturing sales expanded 3.8 percent year-over-year after 13.7 percent in January.
The monthly decline was driven by a 2.4 percent drop in volumes, although industrial prices were also down on the month, by 0.8 percent.
Sales deteriorated across 12 of 21 industries, led by petroleum and coal products (down 14.9 percent), motor vehicles (down 12.3 percent) and primary metal products (down 4.2 percent). On the bright side, machinery was up 3.0 percent to a record high C$4.6 billion, posting its fourth consecutive monthly increase, an encouraging sign for investment activity.
Inventories rose 0.9 percent on the month to a record high C$122.3 billion, led by higher volumes. Combined with declining sales, the inventory-to-sales ratio rose to 1.71 from 1.63, its highest level since September 2022.
Regionally, sales were down across nine provinces, led by Alberta.
The unadjusted manufacturing capacity utilization rate decreased to 77.0 percent in February from 78.9 percent in January.
Looking ahead, new orders were down 2.7 percent on the month after rising 5.8 percent in January, the largest drop since October. Over the past five months, new orders have been down four times. Unfilled orders were up 0.6 percent in February.
The Bank of Canada's first quarter Business Outlook Survey released April 3 said half of Canadian firms have incorporated the risk of a"mild" recession over the next 12 months into their business plans. Most firms still have positive investment intentions in Canada, the survey said. Yet labour force data showed manufacturing employment fell 6,100 in March.
If sales remained constant in March, the increase in the first quarter would be 0.7 percent from the previous quarter.
Despite today's weaker-than-expected report, Econoday's Consensus Divergence Index, at 28, is in the zone consistent with an economy performing appreciably stronger than expected.
The monthly decline was driven by a 2.4 percent drop in volumes, although industrial prices were also down on the month, by 0.8 percent.
Sales deteriorated across 12 of 21 industries, led by petroleum and coal products (down 14.9 percent), motor vehicles (down 12.3 percent) and primary metal products (down 4.2 percent). On the bright side, machinery was up 3.0 percent to a record high C$4.6 billion, posting its fourth consecutive monthly increase, an encouraging sign for investment activity.
Inventories rose 0.9 percent on the month to a record high C$122.3 billion, led by higher volumes. Combined with declining sales, the inventory-to-sales ratio rose to 1.71 from 1.63, its highest level since September 2022.
Regionally, sales were down across nine provinces, led by Alberta.
The unadjusted manufacturing capacity utilization rate decreased to 77.0 percent in February from 78.9 percent in January.
Looking ahead, new orders were down 2.7 percent on the month after rising 5.8 percent in January, the largest drop since October. Over the past five months, new orders have been down four times. Unfilled orders were up 0.6 percent in February.
The Bank of Canada's first quarter Business Outlook Survey released April 3 said half of Canadian firms have incorporated the risk of a"mild" recession over the next 12 months into their business plans. Most firms still have positive investment intentions in Canada, the survey said. Yet labour force data showed manufacturing employment fell 6,100 in March.
If sales remained constant in March, the increase in the first quarter would be 0.7 percent from the previous quarter.
Despite today's weaker-than-expected report, Econoday's Consensus Divergence Index, at 28, is in the zone consistent with an economy performing appreciably stronger than expected.
Market Consensus Before Announcement
Manufacturing sales are expected to fall 2.8 percent in February after jumping 4.1 percent in January.
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.
