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Manufacturing sales advanced 1.2% in March

Ottawa, ON -- Manufacturing sales advanced 1.2% to $44.5 billion in March 2010, according to Statistics Canada...


Ottawa, ON — Manufacturing sales advanced 1.2% to $44.5 billion in March 2010, according to Statistics Canada’s latest Monthly Survey of Manufacturing. Food and motor vehicle manufacturers were the largest contributors to the gains. Manufacturing sales have been trending upward since the low point reached in May 2009.

Constant dollar manufacturing sales increased 1.7% in March. Constant dollar sales have increased for seven consecutive months.

Sales gains were reported in 12 of 21 industries, representing two-thirds of total sales.

Food manufacturers reported the greatest increase in the value of sales, up 3.5% compared with February. This was the largest increase in food sales since January 2008. Prior to the increase in March, food sales had been relatively flat over the preceding six months.

Besides food manufacturing, most of the remaining sales increases for March were attributable to the durable goods industries. Motor vehicle manufacturers reported a 3.6% increase in March, the sixth advance in seven months. However, the gain in motor vehicle manufacturing was largely offset by a 9.6% decrease in aerospace products and parts production.

Other durable good sales increases included non-metallic mineral products (+7.7%) and wood product manufacturing (+4.9%). Non-metallic mineral sales, in particular cement and concrete manufacturers, benefited from warm weather in March. Wood product sales have grown steadily over the past six months.

EVERY PROVINCE REPORTS GAINS

Provincial gains were reported across the country in March, ranging from increases of 0.1% in Quebec to 45.0% in Newfoundland and Labrador.

Sales in the Atlantic provinces rose 6.4% in March after a 9.5% drop the previous month. Sales in the region have increased in five of the past six months.

Manufacturers in Manitoba reported a 4.9% increase in sales compared with February, the strongest gain outside of the Atlantic provinces. Manitoba has not seen the same degree of recovery in manufacturing as the other provinces, with sales increasing only twice in the past six months.

Sales were also strong in British Columbia, up 3.8%. Paper products, transportation, and food manufacturers were behind much of the gains. Manufacturing sales in British Columbia have been on the upswing since July 2009.

In Quebec, sales edged up 0.1% compared with February. A 10.6% drop in the transportation equipment industry was offset by strong gains in food, beverage and tobacco, and chemical product manufacturing. Sales in Ontario advanced 0.7%, reflecting rising sales in motor vehicle and motor vehicle parts manufacturing.

INVENTORY LEVELS DECLINE

Inventory levels fell 1.1% in March compared with February. Inventories dropped steadily from February to September 2009, with the rate of decrease slowing over the past six months.

The decline in March was largely driven by petroleum and coal and aerospace product manufacturers, down 7.3% and 3.3% respectively. Raw materials and finished products were both behind the decrease in petroleum and coal product inventories.

Chemical manufacturing was the main offsetting movement, up 1.4%. About half of the increase was due to resin, synthetic rubber, and artificial and synthetic fibers and filaments manufacturing.

The inventory-to-sales ratio fell from 1.35 in February to 1.32 in March. This was the lowest level since September 2008.

The inventory-to-sales ratio continues to decline

The backlog of unfilled orders declined for the first time in four months, down 0.4% to $53.0 billion.

Unfilled orders in the transportation equipment industry fell 0.6%, despite a 0.5% advance in the aerospace industry. Excluding aerospace products and parts, unfilled orders were down 1.0% compared with February.

The other notable decrease in unfilled orders took place in computer and electronic products, down 2.7%.

UNFILLED ORDERS DECLINE SLIGHTLY AFTER THREE MONTHLY GAINS

New orders decreased 0.7% in March to $44.3 billion. New orders fell in three key industries, namely computers and electronics, transportation equipment, and machinery. Despite the decrease in March, new orders have been trending upward since June 2009.

Data from the April Monthly Survey of Manufacturing will be released on June 15, 2010.