MRO Magazine

Canada’s manufacuring sector continues to recover

Ottawa, ON -- Manufacturing sales rose 2.4% in January 2010 to $44.6 billion, according to Statistics Canada's...


Manufacturing

March 16, 2010
By MRO Magazine


Industries

Ottawa, ON — Manufacturing sales rose 2.4% in January 2010 to $44.6 billion, according to Statistics Canada’s latest Monthly Survey of Manufacturing. With this gain, sales have advanced for five consecutive months.

Sales gains were broadly based in January, with 17 of 21 industries reporting increases compared with December 2009. Some of the larger gains included advances in primary metals, and petroleum and coal products.

Constant dollar manufacturing sales increased 2.2% in January, reaching the highest sales level since November 2008.

Most industries reported an increase in sales for January. Primary metal manufacturers led the gains, up 8.5% compared with December. Sales by primary metal manufacturers have been improving steadily since July 2009. The increase in January was partly due to a rise in production after several plants were shutdown during December.

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Sales of plastic and rubber products advanced 5.6% in January. Most of the gains in this industry reflected increases by tire manufacturers.

The petroleum and coal products industry reported a sales increase of 3.4% in January. Price increases rather than improved volumes were behind most of this advance.

The transportation equipment industry was one of only four industries to report weaker sales in January. The decrease was led by aerospace product and parts production, which declined 3.4% in January, giving back a small portion of the 28.5% increase recorded the previous month.

Most provinces report strong gains

Stronger manufacturing sales were reported in seven provinces in January, led by British Columbia, Quebec and Ontario.

Manufacturers in British Columbia reported a 4.2% rise in sales, reversing a 2.7% decrease the previous month. Other than December, sales in British Columbia had increased every month since August 2009. Gains in January were focused in the primary metals and wood product industries.

Sales in Quebec increased for a fourth consecutive month, up 3.2% from December. The two largest contributors to the provincial sales gains were computer and electronic products, and petroleum and coal products. These advances were partially offset by a 5.8% drop in the transportation equipment industry.

Primary metal and petroleum and coal product manufacturers were behind the gains in Ontario for January. Sales in Ontario have generally been improving since June 2009.

Sales in the Atlantic provinces were up 3.2% in January. Strong gains in New Brunswick (+6.8%) and Nova Scotia (+5.5%) were partially offset by decreased sales in Newfoundland and Labrador (-11.0%) and Prince Edward Island (-7.2%).
Inventory levels stabilize

Inventory levels remained unchanged in January. Manufacturers had shed $8.8 billion or 12.8% of their inventories between October 2008 and September 2009, before levelling off in recent months.

Petroleum and coal product inventories declined 2.1%, despite rising prices. This was the first decrease in petroleum inventories in four months.
Inventory levels stabilize

The largest inventory increase reported was in the chemical product industry (+1.7%), much of which was in the pharmaceutical and medicine sector.

The inventory-to-sales ratio declined for the seventh time in eight months, dropping to 1.33 in January. This was the lowest ratio since September 2008, and was more consistent with levels seen prior to the economic downturn.

Unfilled orders advance

The backlog of unfilled orders advanced 0.4% in January to $52.6 billion, following a 2.2% gain the previous month. This was the first back-to-back increase in unfilled orders since October and November 2008.

Unfilled orders continued their descent in the aerospace industry, decreasing by 3.1% in January. This was the sixth decrease in unfilled orders in seven months for aerospace product and parts manufacturers.

In contrast, excluding the aerospace industry, unfilled orders have increased in three of the previous four months, advancing 3.2% in January.
Unfilled orders rise in January

New orders edged up 0.2% in January to $44.8 billion, the highest level since November 2008. New orders have been generally rising since June 2009.

Data from the February Monthly Survey of Manufacturing will be released on April 16, 2010.