| Consensus | Consensus Range | Actual | Previous | Revised | |
| Month over Month | 1.1% | 1.1% to 1.1% | 1.3% | 4.2% | 3.9% |
| Year over Year | 13.4% | 10.6% | 10.7% |
Highlights
Canadian manufacturing sales growth slowed to 1.3 percent in May from 3.9 percent in April, still a better performance than the 1.1 percent consensus in an Econoday survey of forecasters. The fourth consecutive monthly increase led to a record high level of sales of $78.1 billion. Sales were up 13.4 percent year-over-year.
Much of the increase was price related, as real sales were up just 0.5 percent on the month and 2.8 percent from a year earlier.
Forward-looking indicators support the Bank of Canada's scenario of a growth rebound in the second quarter after two quarters of contraction, with new orders up 9.5 percent. Driven by transportation equipment, unfilled orders rose 6.7 percent to a record high $131.5 billion. Within aerospace, the report cited"stronger demand for business and commercial aircraft, aircraft parts, and maintenance services".
With inventories up 0.5 percent in May, the inventory-to-sales ratio edged down to 1.61 from 1.62.
The (unadjusted) manufacturing capacity utilization rate rose to 82.5 percent in May from 80.4 percent in April.
In May, sales rose across 14 of 21 categories, led by transportation equipment, up 4.1 percent, with motor vehicles and parts up 11.8 percent on the month. Manufacturing sales excluding motor vehicles, parts and accessories expanded 0.8 percent. Also driving up sales was a 4.6 percent gain in the chemical subsector, marking a third consecutive increase. Petroleum and coal product sales increased 0.6 percent.
By contrast, sales of electrical equipment, appliance and components fell 5.8 percent from April, primarily due to lower-than-usual seasonal sales.
Overall, sales increased 1.3 percent in both non-durable and durable goods industries.
Regionally, sales increased in six provinces, led by Ontario.
Market Consensus Before Announcement
The consensus agrees with the Stats Canada preliminary estimate of up 1.1 percent for May from April.
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.