Auto industry pushes Canadian manufacturing sales higher
Manufacturing sales in Canada rose 1.4 percent in September to $41.7 billion, largely reflecting increases in the motor vehicle industry, Statistics Canada reported on November 17. Manufacturing sales have increased in three of the past four months, after dropping to a recent low of $38.5 billion in May. Despite the recent gains, sales remained 18.6% below September 2008 levels.
Most of the manufacturing gains in September were in the motor vehicles and motor vehicle parts industries. Other durable goods industries, such as primary metals and fabricated metals, also contributed to the increase.
Constant dollar manufacturing sales rose 1.8% in September.
Sales advanced in 14 of the 21 manufacturing industries. These industries accounted for over half (53.1%) of total sales.
Motor vehicle manufacturing behind September's gain
In September, motor vehicle sales increased by 16.4% to $3.8 billion, the highest level since September 2008. Sales had fallen to as low as $1.6 billion in January 2009, due to extended shutdowns and poor market conditions.
Motor vehicle parts sales gained 13.7% in September, reflecting rising motor vehicle production. Excluding motor vehicles, parts and accessories, manufacturing sales edged down 0.4% during the month.
Note to readers
All data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.
Preliminary data are provided for the current reference month. Revised data, based on late responses, are updated for the three previous months.
Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.
Durable goods industries include wood products, non-metallic mineral products, primary metals, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.
Production-based industries
For the aerospace industry and shipbuilding industries, the value of production is used instead of sales of goods manufactured. This value is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured.
Unfilled orders are a stock of orders that will contribute to future sales assuming that the orders are not cancelled.
New orders are those received whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month.
Primary metal manufacturers reported a 6.7% sales gain compared with August. Several plants across the country restarted production in September, pushing sales higher after maintenance shutdowns and other closures during the previous months.
Some of these gains were offset by a steep decline in the aerospace products and parts industry. Production fell 28.6% in September following a 34.2% drop in August. As a result, aerospace products and parts production fell to the lowest level since June 2003. Production in this industry has been particularly volatile over the past year.
Other industries reporting sales declines included chemical products (-2.5%) and petroleum and coal products (-1.6%).
Saskatchewan and Ontario report strong gains
Sales in Saskatchewan jumped 16.1% compared with August. Strength in manufacturing in September was mainly as a result of a later than normal harvest this year, which had an impact on food manufacturers. Petroleum and coal product manufacturers also reported increased demand due to extended farm activity in September.
Ontario also reported stronger sales in September, with a 5.0% gain. Most of the increase was due to rising sales in the transportation equipment industry (+14.7%). Petroleum and coal products (+13.8%) and fabricated metal products (+7.9%) were the other sizeable contributors to the increase in Ontario.
Most of the weakness in manufacturing was centred in Quebec and the Atlantic provinces. Quebec reported a 2.2% decline in September, largely due to the aerospace industry. Sales in the Atlantic provinces dropped 12.4%, mostly as a result of weak sales in the petroleum and coal products industry.
Table 1
| August 2009r | September 2009p | August to September 2009 | |
|---|---|---|---|
| Seasonally adjusted | |||
| $ millions | % change1 | ||
| Canada | 41,062 | 41,650 | 1.4 |
| Newfoundland and Labrador | 464 | 445 | -4.1 |
| Prince Edward Island | 105 | 112 | 6.3 |
| Nova Scotia | 725 | 757 | 4.4 |
| New Brunswick | 1,298 | 956 | -26.3 |
| Quebec | 10,432 | 10,197 | -2.2 |
| Ontario | 18,838 | 19,780 | 5.0 |
| Manitoba | 1,171 | 1,202 | 2.6 |
| Saskatchewan | 846 | 981 | 16.1 |
| Alberta | 4,516 | 4,496 | -0.4 |
| British Columbia | 2,665 | 2,721 | 2.1 |
| Yukon | 2 | 2 | -7.9 |
| Northwest Territories and Nunavut | 1 | 1 | 11.7 |
Inventory levels fell for an eighth consecutive month, decreasing 1.9% in September to $59.9 billion. This was the lowest level for inventory stockpiles since February 2000. Inventories decreased in 17 of 21 manufacturing industries in September.
Petroleum and coal products (-10.0%) and aerospace products and parts (-6.4%) were responsible for most of the decreases for the month.
The inventory-to-sales ratio decreased to 1.44 in September, down from 1.49 in August. Rising sales and falling inventory levels in September pulled the inventory-to-sales ratio down to the lowest level since November 2008. The inventory-to-sales ratio had recently been as high as 1.63 in May 2009.
Unfilled orders edge lower
Unfilled orders decreased in 0.6% September. Unfilled orders have fallen in five of the past six months.
Most of the decrease was due to the aerospace industry, which has shed $12.2 billion in orders through completion and cancellation since November 2008. The aerospace industry reported a 0.8% decline in unfilled orders for September. Aerospace products and parts manufacturing accounted for about half of total unfilled orders in September.
Computer and electronic products (-2.6%) and machinery (-1.9%) also reported a decrease in the backlog of orders.
New orders gained 8.3% in September to $41.3 billion. This was the highest level since December 2008.
Available on CANSIM: tables 304-0014, 304-0015 and 377-0008.
Definitions, data sources and methods: survey number 2101.
Table 2
| Sales | Inventories | Unfilled orders | New orders | Inventory-to-sales ratio | |||||
|---|---|---|---|---|---|---|---|---|---|
| Seasonally adjusted | |||||||||
| $ millions | % change | $ millions | % change | $ millions | % change | $ millions | % change | ||
| September 2008 | 51,145 | -0.4 | 67,470 | -0.6 | 66,252 | -0.7 | 50,665 | -5.3 | 1.32 |
| October 2008 | 50,925 | -0.4 | 68,430 | 1.4 | 70,558 | 6.5 | 55,232 | 9.0 | 1.34 |
| November 2008 | 47,331 | -7.1 | 67,946 | -0.7 | 71,238 | 1.0 | 48,011 | -13.1 | 1.44 |
| December 2008 | 43,077 | -9.0 | 66,474 | -2.2 | 69,665 | -2.2 | 41,503 | -13.6 | 1.54 |
| January 2009 | 40,557 | -5.8 | 66,529 | 0.1 | 66,659 | -4.3 | 37,551 | -9.5 | 1.64 |
| February 2009 | 41,426 | 2.1 | 65,965 | -0.8 | 66,556 | -0.2 | 41,324 | 10.0 | 1.59 |
| March 2009 | 40,422 | -2.4 | 64,629 | -2.0 | 67,032 | 0.7 | 40,898 | -1.0 | 1.60 |
| April 2009 | 40,275 | -0.4 | 63,909 | -1.1 | 63,089 | -5.9 | 36,332 | -11.2 | 1.59 |
| May 2009 | 38,488 | -4.4 | 62,792 | -1.7 | 58,648 | -7.0 | 34,047 | -6.3 | 1.63 |
| June 2009 | 39,750 | 3.3 | 62,631 | -0.3 | 59,882 | 2.1 | 40,984 | 20.4 | 1.58 |
| July 2009 | 41,804 | 5.2 | 61,373 | -2.0 | 56,733 | -5.3 | 38,655 | -5.7 | 1.47 |
| August 2009 | 41,062 | -1.8 | 61,074 | -0.5 | 53,863 | -5.1 | 38,192 | -1.2 | 1.49 |
| September 2009 | 41,650 | 1.4 | 59,907 | -1.9 | 53,558 | -0.6 | 41,346 | 8.3 | 1.44 |
