Manufacturing sales fell 1.7 percent on the month in June in another choppy performance that is slightly less weak than Econoday's consensus for a 2.1 percent decline. Year-over-year sales fell into 1.4 percent contraction. Monthly declines swept 14 of 21 subsectors especially petroleum and coal (down 8.3 percent), chemicals (down 6.5 percent), and also machinery (down 5.5 percent). Vehicles were a major positive in the month, jumping 11.4 percent to their highest level since June 2019. When adjusting for inflation, sales in current dollars fell 1.0 percent to indicate that volumes of goods sold also declined in the month.

Energy was a central negative for June, reflecting what the report describes as widespread slowdowns in economic activities together with lower international trade. The report also notes that the decline in chemicals is tied mainly to sharp drops in pesticide, fertilizer and other agricultural chemicals that in turn reflect in part sanctions imposed on Russia and Belarus.

Other readings include a 0.3 percent rise in total inventories, a 0.2 percent rise in unfilled orders (led by autmotive), and an unadjusted 80.3 percent capacity utilization rate which is down from June's 80.8 percent.

After jumping 1.2 percent in May and showing improvement since March, manufacturing sales in June are expected to fall back 2.1 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.