| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Month over Month | 1.2% | 1.2% | -2.8% | -2.9% |
| Year over Year | -0.8% | -1.5% | -1.4% |
Highlights
Driven by higher volumes, manufacturing sales rebounded 1.2 percent in November after contracting 2.9 percent in October, as expected. On a year-over-year basis, sales were down 0.8 percent after declining 1.4 percent the previous month.
Real sales increased 1.6 percent on the month, when producer prices fell 0.4 percent.
Overall, sales increased in 13 of 21 sectors, with durable goods up 1.9 percent and non-durables up 0.5 percent. The monthly expansion was led by gains of 6.6 percent in chemicals, 4.0 percent in primary metals and 4.3 percent in machinery. Motor vehicle sales dropped 4.0 percent, the largest decline of the eight sectors recording lower monthly sales. Statistics Canada cited a shutdown at a major auto assembly plant in Ontario as the main reason behind lower auto sales. Excluding motor vehicles, parts and accessories, manufacturing sales were up 1.5 percent from October. That said, motor vehicle sales increased 26.8 percent from a year earlier. Petroleum and coal decreased 2.2 percent month-to-month.
Forward-looking indicators are not encouraging, with new orders down 0.3 percent and unfilled orders down 0.8 percent.
Inventories increased 0.5 percent on the month to their highest level on record. The inventory-to-sales ratio edged down to 1.73 from 1.74.
Higher sales were accompanied by an increase in the unadjusted capacity utilization rate to 79.5 percent from 77.6 percent on higher production.
Regionally, sales increased in seven provinces, led by Ontario and Quebec, the heart of Canada's manufacturing sector.
With today's report in line with expectations, Econoday's Relative Performance Index is at minus 5 and close to the zero line to indicate that recent data are coming in near Econoday's consensus forecasts. Yet when excluding inflation readings that have been exceeding expectations, the RPI drops to minus 23 to indicate underperformance for the real economy. For the Bank of Canada, sluggish activity combined with excessive inflation points to difficult choices at the bank's upcoming meeting on Wednesday, January 24.
Real sales increased 1.6 percent on the month, when producer prices fell 0.4 percent.
Overall, sales increased in 13 of 21 sectors, with durable goods up 1.9 percent and non-durables up 0.5 percent. The monthly expansion was led by gains of 6.6 percent in chemicals, 4.0 percent in primary metals and 4.3 percent in machinery. Motor vehicle sales dropped 4.0 percent, the largest decline of the eight sectors recording lower monthly sales. Statistics Canada cited a shutdown at a major auto assembly plant in Ontario as the main reason behind lower auto sales. Excluding motor vehicles, parts and accessories, manufacturing sales were up 1.5 percent from October. That said, motor vehicle sales increased 26.8 percent from a year earlier. Petroleum and coal decreased 2.2 percent month-to-month.
Forward-looking indicators are not encouraging, with new orders down 0.3 percent and unfilled orders down 0.8 percent.
Inventories increased 0.5 percent on the month to their highest level on record. The inventory-to-sales ratio edged down to 1.73 from 1.74.
Higher sales were accompanied by an increase in the unadjusted capacity utilization rate to 79.5 percent from 77.6 percent on higher production.
Regionally, sales increased in seven provinces, led by Ontario and Quebec, the heart of Canada's manufacturing sector.
With today's report in line with expectations, Econoday's Relative Performance Index is at minus 5 and close to the zero line to indicate that recent data are coming in near Econoday's consensus forecasts. Yet when excluding inflation readings that have been exceeding expectations, the RPI drops to minus 23 to indicate underperformance for the real economy. For the Bank of Canada, sluggish activity combined with excessive inflation points to difficult choices at the bank's upcoming meeting on Wednesday, January 24.
Market Consensus Before Announcement
After falling 2.8 percent in October, manufacturing sales in November are expected to rebound but only partially, up a consensus 1.2 percent.
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.
