Manufacturing sales rose 0.7 percent in February, as expected, for a 12-month increase of 0.1 percent. Much of the expansion was price related as volumes edged up just 0.1 percent from the previous month. Excluding motor vehicles and parts, sales were up 0.8 percent on the month.

Inventories contracted 0.7 percent from January, bringing the inventory-to-sales ratio to 1.68 from 1.71, the lowest level since September 2023.

Forward-looking indicators point to further manufacturing sales increase, as new orders rose 1.9 percent and unfilled orders 0.8 percent on the month.

Higher sales were accompanied by an increase in the unadjusted capacity utilization rate to 78.1 percent from 77.0 percent, with both durable and non-durable industries up 1.1 percentage point.

The value of sales increased in 13 of 21 subsectors in February, driven by a 4.3 percent advance in petroleum and coal and a 12.6 percent gain in electrical equipment. Machinery, an indicator of investment activity, contracted 0.4 percent. The chemical subsector recorded the largest drop of 5.5 percent.

Regionally, sales were up in half of the provinces, led by Quebec and Alberta. Saskatchewan decreased the most.

After increasing 0.2 percent in January that, however, followed a 1.1 percent decline in December, manufacturing sales in February are expected to rise 0.7 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.