| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | -1.1% | -1.1% to -1.0% | -1.2% | -1.0% |
| Year over Year | -1.1% | 0.7% |
Highlights
Manufacturing sales contracted 1.2 percent in November from the previous month, slightly more than the 1.1 percent decline expected by forecasters in an Econoday survey.
The decrease was driven by weaker activity, as reflected by a 2.3 percent monthly drop in volumes, more relevant to real GDP. Industrial prices were previously reported up 0.9 percent in November.
Inventories inched up 0.1 percent on the month, resulting in an inventory-to-sales ratio of 1.72, up from 1.70 in October and 1.67 a year earlier.
Looking ahead, the outlook isn't encouraging, with new orders down 1.2 percent and unfilled orders up just 0.1 percent.
Weakness was widespread across 15 of 21 subsectors in November, led by a 15.9 percent plunge in motor vehicles to C$3.8 billion, the lowest level since October 2022, and a 6.3 percent decrease in motor vehicle parts. Global semiconductor shortages affected both auto and parts plants activity in November. Excluding motor vehicles and parts and accessories, manufacturing sales managed to edge up 0.1 percent. Transportation equipment down 6.5 percent on the month.
President Donald Trump repeated this week that the U.S. don't need cars made in Canada, while questioning the relevance of the Canada-U.S.-Mexico Agreement up for review in July, continuing to fuel uncertainty for Canada's auto industry.
This uncertainty is factored in by the Bank of Canada, which will closely watch the outcome of the CUSMA negotiations. Until then, U.S. rhetoric and policy shifts will keep the uncertainty high, especially for a sector as integrated into the U.S. supply and production chain as the Canadian auto industry.
Elsewhere, machinery, an indicator of business investment activity, was down 3.2 percent in November after retreating 0.2 percent in October.
On the upside, petroleum and coal products increased 6.8 percent in November as both prices and volumes were up.
Regionally, manufacturing sales declined across eight provinces, led by Ontario and British Columbia.
Market Consensus Before Announcement
Forecasters agree with Statistics Canada’s preliminary estimate of minus 1.1 percent after a drop of 1.0 percent in October.
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.