DAILY NEWS Aug 18, 2014 10:53 AM - 0 comments

June's manufacturing sales had 5th gain in 6 months

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Ottawa - Manufacturing sales rose 0.6% in June 2014 to $52.0 billion, the fifth gain in six months, according to the latest Monthly Survey of Manufacturing from Statistics Canada. The gain stemmed from a 3.0% increase in non-durable goods sales, led by the chemical, petroleum and coal product as well as the food industries. Excluding the chemical industry, total sales edged down 0.1% in June.

Constant dollar sales rose 0.2% in June.

Higher chemical sales lead the gains

Sales in the chemical industry rose 8.6% to $4.2 billion in June, their highest level since October 2008. Much of the gain in June reflected higher than usual sales in the pesticide, fertilizer and other agricultural chemical sub-industry. This year, colder and wetter weather in the Western provinces delayed planting, leading to some sales in this sub-industry shifting from May to June, which contributed to the stronger seasonally adjusted sales for the month. In addition, sales of pharmaceuticals and medicines also rose in June, contributing to the overall gain in the chemical industry.

In the petroleum and coal product industry, sales increased 4.0% to $7.6 billion. Most of the increase stemmed from higher volumes of products sold.

Food sales rose 2.2% to $8.0 billion in June, the fourth increase in six months. Part of the gain in June reflected an increase in the seafood product preparation and packaging sub-industry, following weak sales in May.

Lower sales in the motor vehicle industry offset a portion of the gains in June. Sales in the industry were down 8.6% to $4.5 billion, the first decrease following two months of strong gains.

Sales rise in Alberta and Quebec

Sales rose in six provinces in June, led by Alberta and Quebec. A decrease in Ontario manufacturing sales offset some of the gains.

In Alberta, sales rose 4.7% to $6.9 billion, the sixth consecutive monthly gain. Total sales over the first six months of 2014 were 9.6% higher than in the same period in 2013. In the chemical industry, sales in June rose 12.5% following a 6.2% decline in May. Some sales in this industry shifted from May to June following a later than normal planting season. The machinery industry was also up in June, reflecting higher sales of mining and oil and gas field equipment.

Sales in Quebec increased 2.3% to $12.1 billion, following two months of declines. Over the first half of 2014, sales in Quebec were up 5.8% compared with the same period in 2013. Most of the gain in June stemmed from higher sales in the petroleum and coal product industry. Sales also rose in the chemical and primary metal industries.

Ontario manufacturing sales declined 1.3% to $23.8 billion in June, following four months of gains. Despite the decrease in June, overall manufacturing sales for the province over the first half of 2014 were $140.7 billion, up 5.0% compared with the same period in 2013. The decrease in June was caused by an 8.5% drop in motor vehicle manufacturing sales. Excluding the motor vehicle industry, sales for the province were up 0.5%.

Inventories rise

Inventories rose 0.5% to $72.2 billion in June, the fifth increase in six months. However, because of a similar rise in sales, the inventory-to-sales ratio remained at 1.39, the same level posted in May.

A 13.6% increase in petroleum and coal product inventories was the main factor behind the rise in total manufacturing inventories. Refineries increased their levels of raw materials on hand. Lower inventory levels in the aerospace product and parts industry (-4.4%) offset some of the gain.

Unfilled orders edge down

Unfilled orders edged down 0.3% to $89.1 billion in June, the third decrease in four months. Lower unfilled orders in the aerospace product and parts industry were responsible for the decline. This decrease was mostly offset by higher unfilled orders in the computer and electronic product industry.

In the aerospace product and parts industry, unfilled orders were down 2.0% to $47.0 billion, the fourth consecutive monthly decline. A 3.6% decrease in the value of the US dollar since the end of February was the primary factor causing these declines. Most unfilled orders in the aerospace industry are held in US dollars.

Unfilled orders in the computer and electronic product industry rose 22.6% to $4.2 billion. The gain was the third largest percentage increase since the current series began in 1992. A large increase in the navigational, measuring, medical and control instruments manufacturing sub-industry was the principal factor behind the advance.

New orders rose 0.6% to $51.7 billion in June as a result of gains in 12 of 21 manufacturing industries.

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