Canadian manufacturing sales rose 0.1 percent to C$50.2 billion (US$38 billion) in July, according to Statistics Canada. Higher sales in the food, petroleum and coal products, and primary metals industries were largely offset by a decrease in the production of aerospace product and parts, and by lower machinery sales.
Overall, sales were up in nine of 21 industries, representing about 54 percent of the manufacturing sector. Non-durable goods rose 1 percent to C$23.6 billion (US$17.9 billion), while durable goods decreased 0.7 percent to C$27 billion (US$20.4 billion).
Constant dollar sales increased 0.6 percent, indicating that a higher volume of goods was sold in July.
In the food industry, sales rose 1.9 percent to C$8.5 billion (US$6.4 billion) in July, partly reflecting increases in the grain and oilseed milling industry, as some manufacturers had reported difficulties acquiring canola in the previous two months.
Manufacturing sales in the primary metals industry were up 2.9 percent to C$3.7 billion (US$2.8 billion). The increase was largely concentrated in non-ferrous metal production, and alumina and aluminum production and processing. Prices for primary non-ferrous metal products contributed to the gain, rising 5.3 percent in July, according to the Industrial Product Price Index.
Sales of petroleum and coal products rose 2.5 percent to C$4.3 billion (US$3.3 billion) in July, following two consecutive monthly declines. The increase was largely the result of higher volumes at several oil refineries. Prices for petroleum and coal products, as measured by the Industrial Product Price Index, were down 3.5 percent in July.
Production in the aerospace product and parts industry was down 9 percent to C$1.5 billion (US$1.1 billion) in July, a second consecutive monthly decline. Aerospace production has a tendency to be more volatile compared with the manufacturing sector as a whole. Therefore, the decrease in July was not unusual for the industry, as sales are often lower at the start of each quarter. The increase of goods in process was also lower than normal in July; goods in process are a key component in the calculation of the production value.
Sales in the machinery industry fell 3.3 percent to C$2.6 billion (US$2 billion) in July, following gains in June. Manufacturers in the commercial and service machinery, agricultural, construction and mining machinery, and industrial machinery industries reported lower sales.
Motor vehicle parts sales fell 2.5 percent to C$2.5 billion (US$1.9 billion) in July, after increasing 4.6 percent in June. Despite a shorter shutdown at parts manufacturers this July, declines in the sales of motor vehicle parts were greater than expected, contributing to the decrease in seasonally adjusted sales for the industry.
Sales were up in five provinces in July, with Quebec recording the largest gain in dollar terms, followed by British Columbia.
Manufacturing sales in Quebec were up 0.9 percent to C$11.9 billion (US$9 billion) in July, the fourth consecutive monthly rise. A 12.4 percent gain in sales in the chemical industry was largely responsible for growth in the province. The primary metals, food, and fabricated metal products industries also recorded higher sales. The increases were partly offset by a 5.7 percent decline in the transportation equipment industry.
In British Columbia, sales rose 2.2 percent to C$3.8 billion (US$2.9 billion) in July, reaching their highest level since February 2006. The gain was largely attributable to higher sales in the paper industry (+12.9 percent), after some establishments reported maintenance shutdowns in June. A 4.6 percent increase in the wood products industry also contributed to the gain in July.
Sales fell 1.5 percent in Alberta, reflecting lower sales in the chemical industry, which more than offset the strong gain in the petroleum and coal product industry.
Manufacturing inventories increased 1 percent to C$71.5 billion (US$54.1 billion) in July, the highest level since January 2016. Inventories rose in 11 of 21 industries.
The petroleum and coal products industry (+7.1 percent) posted the largest increase in inventories. Higher inventories in the primary metals (+2.5 percent) and chemical (+2.2 percent) industries also contributed to the overall gain. These rises were partly offset by lower inventory levels in the transportation equipment industry (-1.1 percent).
The inventory-to-sales ratio increased from 1.40 in June to 1.41 in July. This ratio measures the time in months that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders edged down 0.1 percent to C$90.3 billion (US$68.3 billion) in July, after three consecutive monthly gains. The decline was mainly the result of lower unfilled orders in the transportation equipment industry (-0.5 percent).
New orders were down 2.9 percent in July, following three consecutive monthly gains. New orders declined in the aerospace product and parts, and fabricated metal products industries.
For the third month in a row, the Monthly Survey of Manufacturing added three supplementary questions to a sample of about 3,600 respondents in July to assess the impact of the Fort McMurray wildfire and evacuation on manufacturing activities in Canada. About 39 percent of firms answered the supplementary questions, mainly through telephone interviews.
According to the responses to the supplementary questions, 85 manufacturers in July (2.5 percent of the total sample) were affected by the wildfire and evacuation in Fort McMurray, compared with 118 manufacturers in June and 194 in May.
