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Manufacturing sales fell off in April

Ottawa, ON -- Manufacturing sales fell 0.8% in April 2012 to $49.1 billion, the third decline in four months, according to the latest Monthly Survey of Manufacturing survey from Statistics Canada. The aerospace product and parts...


Ottawa, ON — Manufacturing sales fell 0.8% in April 2012 to $49.1 billion, the third decline in four months, according to the latest Monthly Survey of Manufacturing survey from Statistics Canada. The aerospace product and parts industry and the petroleum and coal product industry posted the largest decreases, while sales of motor vehicles rose to the highest level since November 2007.

Sales fell in 13 of 21 industries, representing approximately 45% of the manufacturing sector. Sales of durable goods decreased 0.7%, while non-durable goods sales declined 1.0%.

Constant dollar sales declined 0.6% in April, reflecting a reduced volume of manufactured goods sold. This was also the third drop in four months.

Sales in aerospace and petroleum decline

Production in the aerospace product and parts industry dropped 33.7% in April to $898 million, following strong gains in February and March.

Sales of petroleum and coal products were down 4.9% to $7.1 billion. This was the first decline after three months of increases. The decline was volume-based, as there were temporary shutdowns at some refineries and prices of petroleum and coal products rose 0.5%.

Fabricated metal product producers reported a 4.4% decline in sales to $2.9 billion, reflecting reduced sales in other fabricated metal product manufacturing and architectural and structural metals manufacturing.

Conversely, motor vehicle assembly sales increased 9.0% to $4.5 billion. This was the 9th increase in 10 months for the industry. Sales were at their highest level since November 2007.

Some similarities between Canada and the US

In the United States, where manufacturing sales are referred to as shipments, sales fell 0.3% according to the United States Census Bureau. The decrease in April followed four consecutive months of increases. Shipments in the petroleum and coal products industry were down 4.4%, mirroring the decrease in Canada. This was the largest decline in the industry since July 2009. A 3.1% increase in the transportation equipment industry, reflecting gains in motor vehicle manufacturing, partially offset the decrease.

Largest sales decrease in Quebec

Sales declined in seven provinces in April, with Quebec posting the largest decrease in dollar terms.

Sales in Quebec declined 3.8% to $11.3 billion, following two consecutive months of gains. A 45.6% drop in production in the aerospace product and parts industry was largely responsible for the provincial decrease. Lower sales reported in the fabricated metal products (-5.3%) industry also contributed to the overall decline.

In New Brunswick, sales dropped 17.7% to $1.5 billion, following a 22.4% gain in March. Declines in April were mainly attributable to the non-durable goods industries.

Manufacturing in Alberta was down 1.9% to $6.3 billion, partly reflecting lower sales in the fabricated metal products industry.

An increase in sales in Ontario partially offset the overall declines. Sales advanced 2.4% to $22.9 billion, reflecting a 9.8% rise in motor vehicle assembly sales. Motor vehicle assembly sales have increased in 9 of the last 10 months. Sales increases also occurred in the chemical (+4.2%) and petroleum and coal products (+3.4%) industries.

Inventory levels rise

Inventories rose 1.0% in April to $65.0 billion dollars, the first increase in three months. Gains were reported in 13 of 21 industries, and they were mostly concentrated in inventories of durable goods.

Inventory levels in the transportation industry advanced 3.2% to $9.5 billion, largely reflecting a 5.1% increase in the aerospace product and parts industry. The gains in aerospace product and parts were responsible for over one-third of the rise in manufacturing inventories.

An increase in inventories for the machinery industry (+2.4%) also contributed to the overall advance. Inventories of machinery have increased in 9 of the last 12 months and reached a record level of $6.8 billion in April, partly reflecting growth in mining and oil and gas field equipment machinery.

The inventory-to-sales ratio advanced to 1.32 in April from 1.30 in March. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders unchanged

Unfilled orders remained at $62.6 billion in April, following a 2.1% advance in March. Excluding the aerospace product and parts industry, unfilled orders rose 0.6%.

A 1.1% decline in unfilled orders for the transportation equipment industry partly reflected a decrease in aerospace product and parts (-0.5%). Increases in the fabricated metals (+2.9%), machinery (+1.1%) and computer and electronic products (+2.9%) industries largely offset the decrease in transportation equipment. This was the third consecutive increase in unfilled orders for both machinery and fabricated metals and the highest level on record for these industries.

New orders fell 3.2% to $49.1 billion in April, mostly reflecting a drop in the aerospace product and parts industry. The petroleum and coal products industry and the machinery industry also reported decreases. The declines were partly offset by an increase in new orders for motor vehicles and motor vehicle parts.