In 2015, Canadian manufacturing sales fell 1.5 percent to C$609.5 billion (US$455.3 billion), ending five consecutive years of growth. Sales declined in 9 of 21 industries, after decreasing in 3 of 21 industries in 2014. Constant dollar sales were down 0.9 percent to C$550.8 billion (US$411.5 billion), as a result of lower volumes of goods sold. According to the Industrial Product Price Index, the average price of manufactured goods decreased 0.9 percent in 2015.
In 2015, the durable goods industry accounted for 53 percent of total manufacturing sales, and the non-durable goods industry 47 percent. Durable goods sales increased 2.8 percent, the sixth consecutive gain, while sales in the non-durable goods industry decreased 6.1 percent, the first decline since 2009.
The transportation equipment, food, and petroleum and coal product industries were the top sales contributors in the manufacturing sector. These three industries were responsible for nearly half of total manufacturing sales in 2015.
The petroleum and coal product industry was mainly responsible for the decrease in 2015. Sales declined 28.6 percent to C$59.3 billion (US$44.3 billion), reflecting a 22.3 percent drop in the average price of refined petroleum products. The industry accounted for 9.7 percent of total manufacturing sales in 2015, down from 13.4 percent in 2014, and down from the peak of 14.5 percent in 2012. Excluding petroleum and coal products, manufacturing sales increased 2.6 percent in 2015.
Sales in the primary metal industry decreased 6.6 percent to C$44.7 billion (US$33.4 billion) in 2015, following a 10.1 percent increase in 2014. The decline was due to lower sales in steel product manufacturing from purchased steel (-18.5 percent), and iron and steel mills and ferro-alloy manufacturing (-12.8 percent). Sales in the primary metal manufacturing industry accounted for 7.3 percent of total manufacturing sales, down slightly from 7.7 percent in 2014. Average prices in the industry edged up 0.5 percent in 2015.
In the chemical industry, sales declined 2.4 percent to C$48.6 billion (US$36.3 billion), after two consecutive annual increases. The decrease was attributable to lower sales in three of seven chemical sub-industries.
Partially offsetting these declines, sales in the transportation equipment industry rose 8.9 percent to C$123 billion (US$91.9 billion) in 2015, the fifth increase in six years. This industry represented 20.2 percent of total manufacturing sales. Motor vehicles (+8.5 percent), motor vehicle parts (+9.2 percent), and aerospace products and parts production (+10 percent) were responsible for the advance. The gains in motor vehicles and motor vehicle parts manufacturing reflected higher prices and a shift toward the production of higher-end models. The price of motor vehicles grew 11.6 percent in 2015, while the price of motor vehicle parts was up 7.7 percent. The advance in aerospace product and parts was mainly attributable to the depreciation of the Canadian dollar, as most sales in the sub-industry are reported in US dollars.
The food manufacturing industry recorded its eighth consecutive year of sales growth in 2015. Sales increased 2.9 percent to C$95.7 billion (US$71.5 billion), a record level since the series began in 1992. The gain in 2015 was due to higher sales in the seafood product preparation and packaging industry, the bakery and tortilla manufacturing industry, and the other food manufacturing industry (which includes coffee, tea, and snack food manufacturers). The food industry accounted for 15.7 percent of total manufacturing sales. Prices were up 3.1 percent in 2015, following a 3.7 percent rise in 2014.
Sales in the first quarter of 2015 were down 3.3 percent from the previous quarter, as 14 of 21 industries posted a decline. Sales in the petroleum and coal product industry fell 16.7 percent in the first quarter and accounted for more than half of the decrease in the manufacturing sector. Most of the decline in this industry occurred in January, with prices down 11.2 percent over the month and sales dropping to their lowest level since May 2009. Sales of motor vehicle manufacturing decreased 7.9 percent, as a result of closures for factory retooling. February was the only month in 2015 to record manufacturing sales below C$50 billion (US$37.4 billion).
In the second quarter, manufacturing sales increased 0.8 percent and reached a quarterly high in June. Despite the gains in the quarter, year-to-date sales were down 1.4 percent from the same period in 2014. Sales of petroleum and coal products rose in the first two months of the quarter, mostly reflecting higher prices. In May, prices were 12.8 percent higher than in January. Production in the aerospace product and parts sub-industry advanced 7.4 percent, with monthly growth exceptionally strong in May (+19.8 percent). This gain was primarily due to fluctuations in the Canadian dollar. Motor vehicle manufacturing sales were up 4.8 percent in the second quarter, as the average unit price of vehicles assembled was higher.
Manufacturing sales rose 1.9 percent in the third quarter, with gains in the transportation equipment and food industries. Motor vehicle manufacturing sales reached a nine-year high in August, leading to an 11.2 percent increase for the quarter. The gain stemmed from a combination of higher-priced models and shorter summer shutdowns in July. Sales of motor vehicle parts increased 9.4 percent, on the strength of gains at motor vehicle assembly plants and the depreciation of the Canadian dollar. The food industry was up 4.9 percent in the third quarter, with strong sales reported by dairy manufacturers in July.
In the fourth quarter, sales in the manufacturing sector were down 1 percent, as 11 of 21 industries reported a decline. The petroleum and coal product industry recorded the largest decrease, as sales fell 15 percent in the quarter. Shutdowns at refineries began in September and continued into October, and were more extensive than usual. Prices in the industry were down 5.5 percent in December. The petroleum and coal products industry posted six consecutive monthly decreases in the second half of 2015. Offsetting the lower sales in the fourth quarter was an increase in motor vehicle manufacturing. Sales in the sub-industry were up 4.6 percent, as the average unit price of vehicles reached an annual high in December.
Six provinces posted lower sales in 2015. Alberta manufacturers contributed the most to the overall decline, as sales in the province fell 13.8 percent to C$68 billion (US$50.8 billion). Sales also declined in Quebec, New Brunswick and Saskatchewan, but were up 1.8 percent in Ontario and up 6.9 percent in Nova Scotia.
In Alberta, manufacturing sales fell to their lowest level since 2010. The decline was mainly attributable to lower prices of petroleum and coal products, as sales in the industry dropped 35.6 percent. Machinery sales were down 26.8 percent, partly because of the relation between the mining and oil and gas field machinery sub-industry and the oil and gas extraction sector. Chemical manufacturers reported the third largest decline in the province, with sales down 4.2 percent in the industry.
Manufacturing sales in Quebec were down 0.5 percent to C$145.1 billion (US$108.4 billion) in 2015. Non-durable goods industries were the main contributors to the monthly declines. Sales increased in the transportation equipment (+9.5 percent) and food (+2.4 percent) industries. Fluctuations in the Canadian dollar relative to the US dollar contributed to the higher production value of aerospace product and parts, as the average value of the Canadian dollar depreciated 15.8 percent.
In Ontario, total manufacturing sales rose 1.8 percent to C$289.7 billion (US$216.4 billion) in 2015—the highest level since 2006. Transportation equipment contributed to the higher sales in the province, despite retooling at motor vehicle assembly plants early in the year that reduced sales and production at some plants. However, this retooling work allowed some assembly plants to produce higher-end and/or redesigned models later in the year, leading to higher sales toward the end of 2015. Petroleum and coal product sales were down 28.3 percent on lower prices, and primary metal sales dropped 10.5 percent, partially offsetting the overall provincial growth.
Total inventories rose for the fifth consecutive year in 2015, up 1.9 percent to an annual average of C$72.4 billion (US$54.1 billion), as 17 of 21 industries reported increases. Inventories for durable goods industries rose 4.7 percent to an average of C$45 billion (US$33.6 billion), while inventories for non-durable goods declined 2.4 percent to an average of C$27.4 billion (US$20.5 billion).
Inventories of transportation equipment rose 7.8 percent in 2015, led by increases in motor vehicles (+20.1 percent), motor vehicle parts (+15.2 percent) and aerospace product and parts (+6.9 percent). The depreciation of the Canadian dollar relative to the US dollar contributed to the gains, as a large portion of aerospace inventories is held in US dollars.
Inventories of petroleum and coal products decreased 26.4 percent to an annual average of C$5.1 billion (US$3.8 billion). The decrease in the industry was due to lower prices, as well as lower finished products and raw materials on hand during the year.
In the manufacturing sector, unfilled orders represent a stock of orders that will contribute to future sales assuming that the orders are not cancelled. Unfilled orders increased 8.1 percent to an annual average of C$95.7 billion (US$71.5 billion) in 2015—their highest value on record. Unfilled orders in the transportation equipment industry accounted for over 70 percent of overall manufacturing orders. Transportation equipment industry orders rose 10.3 percent, mainly as a result of gains in the aerospace product and parts sub-industry (+8.3 percent). Movements in the aerospace sub-industry are often attributable to fluctuations in the value of the Canadian dollar relative to the US dollar, given that most orders in the sub-industry are held in US dollars.
In non-durable goods manufacturing industries, unfilled orders dropped 18 percent in the food industry, partly reflecting lower meat product orders (-17.3 percent). The decline was mainly due to the higher price of beef and pork, and the porcine epidemic diarrhea virus that affected hog farming. Unfilled orders were down 15.4 percent in the chemical manufacturing industry, partly because of an 18.9 percent drop in the pharmaceutical and medicine sub-industry.
Employment in the manufacturing sector grew slightly, following two consecutive years of declines. Average employment increased 0.4 percent in 2015 to 1.5 million. Employment grew 8.2 percent in the chemical industry, while it was up 1.4 percent in the food industry. The computer and electronics industry recorded the largest decrease in employment. This was the seventh consecutive decline for the industry. The food, transportation equipment, and fabricated metal industries were the top three employing industries in 2015.
