Ottawa – Manufacturing sales rose 1.6% to $51.6 billion in May 2014, the fourth increase in five months, according to Statistics Canada. The gain was largely due to higher sales in the petroleum and coal product and motor vehicle industries.
Sales rose in 11 of 21 industries, representing about 61% of the manufacturing sector. Constant dollar sales were also up 1.6% in May, indicating a rise in the volume of goods sold.
Sales rise in the petroleum and coal and motor vehicle industries
In the petroleum and coal product industry, sales increased 7.2% to $7.4 billion in May. The gain reflected a return to more normal sales levels at several refineries following partial shutdowns in April for maintenance and retooling work.
Sales in the motor vehicle industry increased 9.3% to $4.9 billion, reaching the highest level since January 2012. Sales at some plants returned to normal levels after shutdowns for part of April.
Primary metal sales rose 2.4% to $3.9 billion in May. Gains in the industry were widespread.
A 2.0% decline in the food industry offset some of the gains in May. One factor behind the decrease was lower than normal sales in the seafood product preparation and packaging industry.
Ontario manufacturing sales increase
Manufacturing sales rose in six provinces in May, with almost two-thirds of the gain concentrated in Ontario.
In Ontario, sales rose 2.3% to $24.1 billion, the fourth consecutive increase for the province. With the latest advance, sales reached their highest level since July 2008, before the last recession. Most of the gain in May was caused by higher sales in the motor vehicle industry.
Sales in New Brunswick rose 15.8% to $1.6 billion, following six months of declines. Higher non-durable goods sales were the primary factor behind the gain.
The manufacturing sector in Alberta posted a 1.6% increase to $6.7 billion in sales. The rise was the fifth consecutive monthly advance for the province. The gain in May stemmed from higher petroleum and coal product sales.
In Newfoundland and Labrador, sales declined 11.3% to $488 million. Manufacturing sales in the province tend to be more volatile compared with other provinces. The decline reflected lower sales of non-durable goods.
Quebec manufacturing edged down 0.4% to $11.8 billion in May. Declines in the food and paper industries were partly offset by higher primary metal sales.
Inventories declined 0.6% to $71.9 billion in May, the first decline in five months. The decrease in May was largely a result of lower inventories held by petroleum and coal product manufacturers.
In the petroleum and coal product industry, inventories dropped 7.1% to $6.9 billion. Most of the decline reflected lower raw materials on hand at some plants.
Transportation equipment inventories declined 0.9% to $12.8 billion in May. The decrease was caused by lower inventories in the motor vehicle as well as other transportation equipment industries.
The declines were partly offset by a 1.4% gain in primary metal inventories and a 1.5% increase in the chemical industry.
The inventory-to-sales ratio decreased from 1.42 in April to 1.39 in May, its lowest level since December 2013. The ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders decline
Unfilled orders were down 0.5% to $89.3 billion in May as a result of a decline in the aerospace product and parts industry. Higher unfilled orders in the machinery and primary metal industries offset part of the decline.
In the aerospace product and parts industry, unfilled orders decreased 2.2% to $47.9 billion in May. Part of the decrease reflected a 0.8% gain in the value of the Canadian dollar relative to the US dollar. Most unfilled orders in the aerospace industry are held in US dollars.
Unfilled orders rose 6.8% to $7.2 billion in the machinery industry, the fourth increase in five months. With the advance in May, unfilled orders for the industry reached their highest level since July 2013. In the primary metal industry, unfilled orders advanced 20.1%, reaching their highest level since November 2008.
New orders edged down 0.1% to $51.2 billion. Declines in the transportation equipment and food industries were largely offset by gains in the petroleum and coal product and primary metal industries.