Canadian Manufacturing Sales Down 1.5% in September - Modern Distribution Management

Canadian Manufacturing Sales Down 1.5% in September

Declines in motor vehicle assembly and the petroleum and coal product industries led the decrease.

Canadian manufacturing sales edged down 1.5 percent to $51.1 billion in September, following a 0.6 percent decrease in August. Lower sales in the motor vehicle assembly and the petroleum and coal product industries were responsible for the decline.

Sales were down in 13 of 21 industries, representing 78.6 percent of Canadian manufacturing.

Constant dollar manufacturing sales were down 1.6 percent, indicating that the volume of goods sold was lower in September.

In the motor vehicle assembly industry, sales fell 10.3 percent to $5 billion in September following four months of gains. In August, sales had reached $5.6 billion, their highest level since March 2007. The decline in September mostly reflected lower numbers of vehicles produced. In contrast to the motor vehicle assembly industry, sales in the motor vehicle parts industry edged down 0.1 percent in September.

Sales in the petroleum and coal product industry were down 7.1 percent to $4.8 billion in September, the fourth consecutive decline. The decrease largely reflected partial shutdowns at a number of refineries during the month for maintenance work. Although refineries often shut down for part of September, this year the shutdowns were more extensive than usual. Prices for refined petroleum products declined 4 percent, according to the Industrial Product Price Index.

Higher sales in the machinery and primary metal industries offset some of the declines. In the machinery industry, sales rose 9.6 percent to $2.9 billion as a result of widespread gains. Primary metal sales were up 4.3 percent, also as a result of numerous gains.

Sales decreased in four provinces in September, with the largest decline in Ontario.

In Ontario, sales were down 2.5 percent to $24.4 billion. The decrease stemmed mostly from a 10.1 percent drop in motor vehicle assembly sales and a 7.1 percent decline in the petroleum and coal product industry. These decreases were partly offset by a 13.1 percent advance in machinery sales.

Sales in Quebec declined 1 percent to $12 billion in September, the third consecutive monthly decrease. The petroleum and coal product industry posted the largest decline. Sales of aerospace product and parts, chemicals and fabricated metal products also fell. Lower sales in these industries were partly offset by a 10.2 percent gain in the primary metal industry.

Alberta manufacturing sales decreased 1.4 percent to $5.7 billion in September, the third consecutive monthly decline. The decrease was due to a 10.6 percent drop in petroleum and coal product sales. Higher sales (+13 percent) in the machinery industry offset some of the decrease.

Manufacturing inventories were down 0.4 percent to $73 billion in September. Inventory levels decreased 4.2 percent in the petroleum and coal product industry and 2.6 percent in the primary metal industry. Inventories of machinery (-2 percent) also declined. Inventory levels rose in the aerospace product and parts (+1.4 percent) and motor vehicle assembly (+5.7 percent) industries.

The inventory-to-sales ratio rose from 1.41 in August to 1.43 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 decreased 0.7 percent to $96.1 billion in September, as a result of a 0.9 percent decline in the transportation equipment industry.

Aerospace unfilled orders decreased 0.7 percent to $52.8 billion, despite an increase in the value of the US dollar relative to the Canadian dollar. A substantial portion of aerospace unfilled orders are held in US dollars. Unfilled orders were also down in the other transportation equipment industry and the railroad rolling stock industry.

New orders decreased 2.8 percent, mostly as a result of declines in the transportation equipment industry.

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