MRO Magazine

Manufacturing sales declined in five provinces in August


October 16, 2015
By Bill Roebuck


Mfg sales Aug15Ottawa – Manufacturing sales edged down 0.2% to $52.1 billion in August 2015, following three consecutive monthly advances, Statistics Canada reports. The largest declines were recorded in the petroleum and coal product, motor vehicle parts, and aerospace product and parts industries. However, these declines were largely offset by gains in the motor vehicle assembly and wood product industries.

Sales were down in 8 of 21 main industries, representing approximately half of the sector.

Constant dollar sales decreased 0.1%, indicating that the volume of goods produced by Canadian manufacturers edged down.

Sales declines largely offset by gains


In the petroleum and coal product industry, sales declined for a third consecutive month, falling 5.2% to $5.1 billion. The decrease mostly reflected a 4.7% decline in prices for petroleum and coal products, as recorded by the Industrial Product Price Index. The volume of products sold also decreased in August.

Motor vehicle parts sales declined 4.4% to $2.5 billion. Normally, parts manufacturers report large gains in August as motor vehicle assembly plants ramp up production following regular shutdowns every July. This year, the sales gains reported by parts manufacturers were smaller than usual, leading to the decrease in seasonally adjusted sales for the industry.

Production in the aerospace product and parts industry was down 3.5% to $1.9 billion in August. Despite the decline in August, year-to-date aerospace production was up 12.1% in 2015 compared with the same period last year.

In the motor vehicle assembly industry, sales rose 6.7% to $5.7 billion following maintenance shutdowns in July. Some manufacturers reported selling more higher-end vehicles in August. The sales value in August was the highest recorded for the industry since March 2007.

Wood product sales were up 5.1% to $2.2 billion in August as a result of widespread gains in the industry. Wood product manufacturers in Quebec, British Columbia and Alberta posted gains.

Sales down in five provinces

Sales declined in five provinces in August, with Quebec, Alberta and New Brunswick posting the largest decreases. Higher sales in Ontario largely offset these declines.

In Quebec, sales were down 1.2% to $12.0 billion, mostly reflecting lower sales in the primary metal (-7.1%) industry. Sales were also down in the petroleum and coal product industry.

Alberta’s manufacturing sales declined 1.9% to $5.7 billion in August, the 10th decrease since the sales peak of $6.9 billion in June 2014. The downward trend following the peak stems from lower sales of petroleum and coal products, machinery, chemicals and fabricated metal products. The decrease in August 2015 stemmed from lower sales in the machinery (-14.1%), petroleum and coal product (-2.5%) and fabricated metal product (-7.1%) industries.

Sales decreased 7.1% to $1.4 billion in New Brunswick, the fourth decline in 2015. The drop was caused by lower sales of non-durable goods in August.

In Ontario, sales rose 1.1% to $25.3 billion, the third consecutive gain. Higher sales in the motor vehicle assembly industry (+6.7%) were responsible for the provincial increase. Sales were also up in the primary metal industry (+5.1%). A 4.5% decline in the motor vehicle parts industry offset some of the gains.

Inventories rise

Inventories rose 0.5% in August to $73.4 billion. Inventories were up in 17 of 21 industries, led by gains in the aerospace product and parts (+1.5%), food (+1.2%), machinery (+1.2%) and computer and electronic product (+2.9%) industries. Most of the gain in the aerospace industry reflected the higher value of the US dollar relative to the Canadian dollar. Most of the inventories in the aerospace industry are held in US dollars. A 3.1% decline in petroleum and coal product inventories offset a portion of the gains.

The inventory-to-sales ratio rose from 1.40 in July to 1.41 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 edge up

Unfilled orders edged up 0.2% to $96.9 billion in August. Over half of the gain stemmed from a 0.3% increase in the aerospace product and parts industry. Unfilled orders in the aerospace industry reached $53.1 billion in August. Unfilled orders also rose in the railroad rolling stock and the fabricated metal product industries.

New orders were down 5.6% as a result of declines in the aerospace product and parts industry.