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Manufacturing sales in Canada drop for third month in a row

Ottawa, ON -- Manufacturing sales fell 1.5% (-$713 million) in June 2011 to $45.3 billion, the lowest level since November 2010, Statistics Canada reports in its latest Monthly Survey of Manufacturing. Sales have declined for three consecutive...


Ottawa, ON — Manufacturing sales fell 1.5% (-$713 million) in June 2011 to $45.3 billion, the lowest level since November 2010, Statistics Canada reports in its latest Monthly Survey of Manufacturing. Sales have declined for three consecutive months after growing steadily since May 2009.

Constant dollar manufacturing sales were down 1.6% in June.

Sales of durable goods declined 1.9% in June, while sales of non-durable goods were 1.2% lower. In particular, sales were down in the petroleum and coal product, miscellaneous, and machinery industries.

Lower sales were reported in 15 of 21 industries, representing 77.5% of total manufacturing. In June, six provinces reported declines.

Petroleum and coal sales behind much of June’s decrease

 

Sales of petroleum and coal products fell 6.6% in June to $5.8 billion. The decrease reflected price declines of 2.6% and lower volumes as a result of ongoing shutdowns for retooling at various plants.

Miscellaneous manufacturing sales fell 16.1% in June after rising 2.4% in May. The decline mainly reflected a drop in sales by manufacturers of jewellery and silverware.

Machinery manufacturing sales declined 4.2% in June after a 7.8% increase in May. Despite the drop, machinery sales remained strong and have risen in 14 of the past 17 months.

On the upside, sales in the chemical industry rose 5.8%, reflecting gains in the pesticide, fertilizer and other agricultural chemical industry.

Manufacturing sales decline in most provinces

 

Manufacturing sales were down in six provinces in June, with Ontario, Quebec, and Newfoundland and Labrador reporting the largest sales decreases.

In Ontario, sales fell 2.0% as 17 of 21 industries reported declines. The greatest decreases came in the miscellaneous, food, and transportation equipment industries.

Sales in Quebec declined 1.6% in June, as a result of decreases in petroleum and coal products, primary metals, and computer and electronic products. Increases in food and machinery sales partially offset the declines.

Sales in Newfoundland and Labrador fell 26.9% in June, as a result of declines in non-durable goods. It was the third consecutive monthly decline.

Manitoba posted the largest sales growth in June, up 3.9%. The increase was driven by advances in the chemical, primary metal, and machinery industries.

Inventory levels flat for June

 

After eight consecutive months of growth, inventory levels were unchanged in June, remaining at their highest level since April 2009.

Increased inventories were reported by manufacturers in the machinery (+2.2%), food (+2.1%) and miscellaneous (+5.1%) industries.

These increases were offset by declines in the petroleum and coal product (-3.6%) and chemical (-1.8%) industries.

The inventory-to-sales ratio increased from 1.37 in May to 1.39 in June, the highest level since December 2009. The ratio has been rising steadily since January 2011.

Unfilled orders rise again

 

Unfilled orders advanced 3.4% in June to $58.9 billion, the sixth consecutive monthly increase.

The increase in unfilled orders was concentrated in the aerospace product and parts industry (+6.9%). This increase partly reflected the depreciation of the Canadian dollar. Excluding the aerospace industry, unfilled orders increased 0.4% to $30.4 billion.

The largest decrease occurred in the primary metal industry, where unfilled orders fell 9.1% from May.

New orders increased 1.6% in June to $47.3 billion, led by gains in the aerospace product and parts industry. The increase was partially offset by declines in petroleum and coal product, primary metal and miscellaneous goods.