Canadian manufacturing sales rose 1.7 percent to $52.2 billion in July, as sales in the motor vehicle parts and motor vehicle assembly industries increased, according to Statistics Canada. The advance in July mostly reflected a higher volume of goods sold, as constant dollar sales increased 1.1 percent.
Higher sales of motor vehicle parts and motor vehicles were responsible for almost two-thirds of the national increase in July. Gains in food products and fabricated metal products bolstered the advance. Lower sales of primary metals offset a portion of the growth.
Sales of motor vehicle parts rose 12.1 percent to $2.6 billion in July, following a 0.4 percent decline in June. Canadian parts manufacturers supply domestic, American and Mexican assembly plants. In July, scheduled shutdowns for North American assembly plants were shorter than in previous years. Sales in the motor vehicle assembly industry rose 5.6 percent to $5.3 billion.
Overall, 12 out of 21 industries reported higher sales, representing 62.8 percent of the manufacturing sector. Sales of food products rose 2.3 percent to $8.2 billion, reflecting widespread increases led by dairy manufacturers. Fabricated metal products rose 3.1 percent to $2.9 billion in July, following a 5.4 percent decrease in June.
Sales of primary metals fell 3 percent to $3.7 billion and moderated the overall gain. The industry has been generally trending downwards in 2015. In 2014, price-related gains in iron and steel mills and ferro-alloy manufacturing led to higher sales of primary metals. Conversely, lower prices for the sub-industry in 2015 have contributed to recent declines.
Sales in Ontario rose 4.4 percent to $24.9 billion, with the gain in transportation equipment accounting for over three-quarters of the dollar gains. Following a 4.8 percent increase in June, sales of motor vehicles rose 6.0 percent to their highest level since November 2007. Sales of motor vehicle parts increased 12.5 percent in July. Production in the aerospace product and parts industry also rose in July.
Sales in Quebec fell 1.8 percent to $12.2 billion, following two consecutive gains. Production of aerospace product and parts fell 21.1 percent and was the main contributor to the decline. Aerospace production is much more volatile than the manufacturing sector as a whole; hence, the decline in July was not unusually large for the industry. Lower sales of primary metals (-5.4 percent) also contributed to the decline.
As a result of declines in multiple industries, sales fell 1.6 percent to $5.9 billion in Alberta. Sales of chemical products decreased 2.9 percent to $1.1 billion. In the primary metal industry, widespread declines among manufacturers led to a 20.6 percent drop in sales for the industry. Sales of machinery products decreased 4.0 percent, the fifth decline in 2015. The downward trend for the machinery industry in 2015 is partly related to lower sales of mining and oil and gas field machinery, a sub-industry with close ties to oil and gas extraction. After experiencing growth during the post-recession oil and gas boom, sales for this sub-industry declined 56.6 percent on an unadjusted basis from the December 2014 to July 2015.
Inventories rose 1.1 percent to $72.9 billion in July. About three-quarters of the gain stemmed from higher inventories in the transportation equipment industry.
Aerospace product and parts inventories rose 3.8 percent to $8.6 billion in July, largely as a result of the gain in the value of the US dollar relative to the Canadian dollar over the course of the month. A substantial portion of inventories in the aerospace industry are held in US dollars.
Inventories advanced 11.3 percent in the motor vehicle industry, largely because of an increase in finished products held by manufacturers in the industry. In the motor vehicle parts industry, inventory levels rose 3.8 percent.
The inventory-to-sales ratio was unchanged from June and stood at 1.40 in July. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders rose 2.7 percent to $96.4 billion in July, following five months of declines. The gain stemmed from higher unfilled orders in the aerospace product and parts industry. Excluding the aerospace industry, unfilled orders declined 0.1 percent.
In the aerospace industry, unfilled orders were up 5.2 percent to $52.8 billion. The gain was mostly caused by an increase in the value of the US dollar relative to the Canadian dollar in July. The majority of unfilled orders in the industry are held in US dollars.
New orders rose 10.2 percent to $54.8 billion in July. The gain mostly reflected an increase in new orders in the aerospace industry.
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