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Manufacturing sales see fourth increase in five months

Ottawa – Manufacturing sales rose 0.6% to $49.9 billion in September 2013, the fourth increase in five months, according to the latest Monthly Survey of Manufacturing from Statistics Canada. The gain in September was largely a result of...


Ottawa – Manufacturing sales rose 0.6% to $49.9 billion in September 2013, the fourth increase in five months, according to the latest Monthly Survey of Manufacturing from Statistics Canada. The gain in September was largely a result of higher sales in the motor vehicle assembly and food industries. Total sales in September were at their highest level since June 2012.

Sales rose in 11 of 21 industries, representing about 55% of Canadian manufacturing. Both the durable and the non-durable goods industries posted 0.6% sales gains. Constant dollar sales increased 1.0% in September, indicating a rise in volumes.

Motor vehicle and food sales lead the gains

In the motor vehicle assembly industry, sales were up 5.4% to $4.7 billion in September. Some manufacturers indicated that sales rose during the month because of favourable market conditions. As well, the introduction of some 2014 models contributed to the sales gain.

Sales in the motor vehicle parts industry rose 2.5% to $2.0 billion. Since reaching a peak of $2.2 billion in June 2012, sales have been generally decreasing. The gain in September was only the third since the peak.

Food sales rose 2.6% to $7.5 billion in September, the largest increase since December 2012. The gain stemmed from higher sales in the grain and oilseed milling sub-industry. Several respondents in the sub-industry indicated that some plants were shut down for maintenance work for a part of August.

In September, lower sales in the primary metal, aerospace product and parts, petroleum and coal product, fabricated metal product as well as the computer and electronic product industries offset a portion of the gains.

Ontario and New Brunswick lead the way

In Ontario, sales increased 1.4% to $22.9 billion. The rise was largely a result of higher sales in the motor vehicle assembly, the motor vehicle parts as well as the chemical industries. A 5.2% decline in the petroleum and coal product industry partly offset these gains.

Sales in New Brunswick were up 16.8% to $1.7 billion, the largest monthly gain in the province since March 2012. The increase reflected higher sales of non-durable goods.

Saskatchewan’s manufacturing sector posted a sales gain of 9.0% in September. The total sales level of $1.3 billion for the province was the highest ever recorded. The gain was mostly attributable to higher sales of non-durable goods.

In Alberta, sales fell 3.6% to $6.3 billion. Decreases in the petroleum and coal product as well as chemical industries were largely responsible for the provincial decline.

In Quebec, sales were down 1.0% to $11.5 billion, giving back some of the 3.8% increase recorded in August. Lower sales were posted by 13 of 21 industries in the province.

Inventories decline in September

Total inventories fell 0.9% to $68.2 billion in September. Inventories have been generally trending upwards over the past several years. The decline in September was the third in nine months.

In the petroleum and coal product industry, inventories were down 10.8% to $5.6 billion. About 53% of the decline reflected a decrease in raw materials held by manufacturers.

Transportation equipment inventories declined 2.2% to $11.6 billion. Lower inventories in the aerospace product and parts as well as the motor vehicle assembly industries were largely responsible for the decline.

The inventory-to-sales ratio declined to 1.37 in September from 1.39 in August. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders decrease

Unfilled orders declined 2.2% to $71.9 billion in September. Most of the decrease was a result of lower unfilled orders in the aerospace product and parts industry. The machinery industry and the electrical equipment, appliance and component industry also contributed to the decline in total unfilled orders.

In the aerospace product and parts industry, unfilled orders decreased 2.9% to $40.7 billion. The decline largely reflected a 2.5% drop in the value of the US dollar relative to the Canadian dollar in September. Most unfilled orders in the industry are held in US dollars.

Unfilled orders were down 2.9% in the machinery industry and 6.1% in the electrical equipment, appliance and component industry. For both industries, reported decreases were widespread.

New orders declined 2.6% to $48.3 billion, as a result of a decrease in the aerospace product and parts industry.