MRO Magazine

Manufacturing sales up 17.6% from previous low (October 15, 2010)

Ottawa, ON - Manufacturing sales increased 2.0% in August 2010 to $45.1 billion, Statistics Canada reports in ...


Ottawa, ON – Manufacturing sales increased 2.0% in August 2010 to $45.1 billion, Statistics Canada reports in its latest Monthly Survey of Manufacturing. Gains were widespread across industries; however, the main contributors to the increase were motor vehicle and petroleum and coal product manufacturers. Higher sales volumes were responsible for most of the gain.

With the increase, manufacturing sales were 17.6% higher than their most recent low, reached in May 2009.

Constant dollar manufacturing sales increased 2.1% in August.

Higher sales were seen in 15 of 21 industries, representing 81.8% of total sales.

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August’s increase mostly reflected higher sales in the motor vehicle and the petroleum and coal products industries.

Sales rose 13.9% to $4.0 billion in the motor vehicle manufacturing industry. Production in August increased following widespread plant shutdowns in July.

In the petroleum and coal products industry, sales rose 2.4% in August to $5.4 billion. The rise mostly reflected higher sales volumes.

Other industries contributing to the overall increase in factory sales included non-metallic mineral products (+6.3%), fabricated metal products (+2.3%), chemicals (+1.5%) and paper (+2.3%).

Among those recording declines was the primary metals industry, where sales fell 2.2%. This was the result of lower sales volumes at several plants.

SALES RISE IN FIVE PROVINCES

In August, sales increased in Ontario, Quebec, Saskatchewan, Alberta and Nova Scotia.

In Ontario, factories reported a 2.9% increase in sales. The main factor was growth in sales in the motor vehicle industry, where production resumed following widespread plant shutdowns in July. Also contributing to the increase was a 6.5% rise in sales in the petroleum and coal products industry and a 2.0% gain in the food industry.

Sales rose 2.3% in Quebec, reflecting gains in a number of industries. The main industries contributing to the growth were transportation equipment (+7.3%), petroleum and coal products (+4.1%) and paper (+6.3%).

In Alberta, manufacturing sales increased 2.0%, largely on the strength of the chemical (+6.4%) and petroleum and coal products (+3.8%) industries. A 2.7% decline in the food industry partially offset these gains.

Sales increased 6.1% in Saskatchewan and 2.1% in Nova Scotia.

Sales were down 4.4% in both Manitoba and New Brunswick. In Manitoba, declines in the primary metals industry and the machinery industry were mostly responsible for the province’s decrease. In New Brunswick, non-durable goods industries were behind the drop.

The other provinces with sales decreases were Prince Edward Island (-5.9%), Newfoundland and Labrador (-0.7%) and British Columbia (-0.1%).

INVENTORY LEVELS UP

Inventories levels increased 1.3% in August to $60.0 billion. The rise in inventories over the past three months has reversed a decline that occurred from November 2009 to May 2010.

The main contributors to August’s increase were aerospace product and parts (+5.6%), primary metals (+2.5%), machinery (+2.3%) and computer and electronic products (+4.7%).

The inventory-to-sales ratio declined to 1.33 in August. The ratio has stabilized in recent months, after declining rapidly between May 2009 and March 2010.

UNFILLED ORDERS RISE

Unfilled orders rose 1.5% to $54.7 billion in August. The backlog of orders at manufacturing plants across Canada has been gradually increasing since November 2009.

The aerospace products and parts industry made the largest contribution to the overall increase. Unfilled orders in the aerospace products and parts industry rose 1.7% to $23.3 billion.

New orders increased by 5.3% in August to $45.9 billion.

Data from the September Monthly Survey of Manufacturing will be released on November 16, 2010.