MRO Magazine

Manufacturing sales fell in six provinces in October

Ottawa – Manufacturing sales declined 0.6% in October 2014 to $52.7 billion, the second decrease in 2014, according to the latest Monthly Survey of Manufacturing from Statistics Canada. The drop reflected lower production of aerospace product and parts and a decrease in primary metal sales.

Notwithstanding the lower overall sales, manufacturers in 15 of 21 industries, representing more than 60% of total manufacturing, reported higher sales in October. Excluding the aerospace product and parts, and primary metals industries, sales in the manufacturing sector rose 0.4%.

Constant dollar sales fell 0.5%, indicating a lower volume of manufactured goods sold.

Declines in aerospace and primary metals


Production of aerospace products and parts fell 15.6% to $1.6 billion in October, following a 17.4% increase in September. Lower production was widespread in the industry. The decline was more indicative of strong production in September than weak production in October. In September 2014, monthly production of aerospace product and parts reached its highest level since the current series began in 1992.

Sales were also lower in the primary metals industry, down 5.5% to $4.1 billion. Despite the decline, sales in October were the second highest of any month in 2014, and 14.6% higher than in October 2013. In September 2014, sales of primary metals were at their highest level since October 2008.

A 1.8% increase in the sales of motor vehicles partly offset the decline. The rise was the third in four months for the motor vehicle industry. Sales in October were 9.1% higher than those in October a year earlier. Year-to-date motor vehicle sales were 4.9% higher than in the same period in 2013.

Sales lower in Quebec and New Brunswick

Manufacturing sales fell in six provinces, with Quebec and New Brunswick posting the largest declines.

Sales in Quebec decreased 3.0% in October, giving back part of the 6.7% increase recorded in September. Manufacturers of aerospace product and parts, and primary metals reported the largest declines. Notwithstanding the decrease, sales in October were 5.5% higher than in October 2013 and have surpassed the $12-billion mark in each of the last five months, a streak that was last observed in 2008.

In New Brunswick, manufacturing sales fell 11.7% to $1.3 billion — their lowest level since November 2010 — mainly as result of lower sales of non-durable goods. This was the third consecutive month of lower sales for the province, and the ninth decline in 12 months.

Lower sales in these provinces were partially offset by gains in Newfoundland and Labrador, where sales more than doubled as a result of a jump in the sale of non-durable goods. Manufactured goods sales in Newfoundland and Labrador tend to be volatile compared with other provinces.

In addition, sales in Alberta rose 1.3% to $6.8 billion, the second consecutive increase. The rise was widespread as 14 of 21 industries posted higher sales, led by a 3.2% increase in the sale of food.

Inventories rise

Inventories in the manufacturing sector rose 0.5% to $71.3 billion in October. Higher stocks in the transportation equipment, fabricated metal product, and machinery industries all contributed to the increase. Notably, goods-in-process inventories in the fabricated metal product industry rose 4.7% to their highest level in more than two years.

The inventory-to-sales ratio rose to 1.35 in October from 1.34 in September. 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 advance for the second consecutive month

Unfilled orders grew for the second consecutive month in October, up 0.5% to $90.9 billion, reflecting higher unfilled orders in the transportation equipment industry. In particular, unfilled orders in the aerospace product and parts industry rose 1.1% to $49.2 billion in October. In 2014, increasing unfilled orders throughout the transportation sub-industries have pushed total unfilled orders in the manufacturing sector to their highest level since this series began in 1992.

The increase in October particularly reflected the impact that the declining value of the Canadian dollar had on the aerospace industry. Most of the unfilled orders in the aerospace industry are held in US dollars, and the declining value of the Canadian dollar increases the value of these orders.

New orders fell 1.9% to $53.2 billion, as a result of a decline in the transportation equipment and primary metal industries.