Canadian Manufacturing Sales Up 2.5% in July - Modern Distribution Management

Canadian Manufacturing Sales Up 2.5% in July

Eight provinces posted higher sales in July with the bulk of the gain as in Ontario.

Canadian manufacturing sales increased 2.5 percent to C$53.7 billion (US$48.7 billion) in July, exceeding the previous record of C$53.2 billion (US$48.3 billion) set in July 2008. Manufacturing sales have trended upwards since January 2014. The gain in July was largely attributable to higher sales in the transportation equipment and primary metal industries.

Sales rose in 16 of 21 industries, representing about 56 percent of Canadian manufacturing.

Constant dollar sales rose 2.8 percent in July, indicating the gain was mainly due to a rise in volumes rather than prices.

Transportation equipment sales rose 10.3 percent to C$10.1 billion (US$9.17 billion) in July. The advance was mainly due to gains in the motor vehicle, aerospace product and parts, and other transportation equipment sub-industries.

In the motor vehicle sub-industry, sales increased 11.6 percent to C$5.1 billion (US$4.63 billion). Historically, most automotive plants have shutdowns in July. However, this year, several plants reported shorter or no shutdowns during July, which accounted for the stronger than normal month.

Primary metal sales rose 4 percent to C$4.2 billion (US$3.81 billion) in July. Gains in the industry were widespread.

In July, five industries reported lower sales, with food manufacturing reporting the largest decrease, down 1.4 percent to C$7.9 billion (US$7.2 billion).

While eight provinces posted higher sales in July, the bulk of the gain was in Ontario.

Sales in Ontario rose 4.2 percent to C$25 billion (US$22.7 billion) in July. About 90 percent of the provincial gain stemmed from a 12.2 percent advance in the transportation equipment industry. Sales rose 3.9 percent in the primary metal industry and 4.4 percent in the fabricated metal product industry. A 3.6 percent decline in the food industry offset some of these gains.

The second largest gain for July was in Manitoba, where manufacturing sales rose 15.4 percent to C$1.5 billion (US$1.4 billion). Most of the gain reflected an increase in the transportation equipment and primary metal industries.

In Alberta, sales declined 0.8 percent to C$6.9 billion (US$6.3 billion). This was the second decline in seven months. Decreases in the petroleum and coal product and food industries were largely responsible for the provincial decline.

Inventory levels remained virtually unchanged in July, edging up 0.1 percent to C$71.5 billion (US$64.9 billion). Higher inventories held by manufacturers in the aerospace product and parts industry were almost completely offset by a decrease in the petroleum and coal product industry.

In the aerospace product and parts industry, inventories increased 4.6 percent to C$8.2 billion (US$7.44 billion). The gain was mostly the result of higher goods in process and finished products on hand.

In the petroleum and coal product industry, inventories fell 2.6 percent to C$7.6 billion (US$6.9 billion). A decrease in finished products held by manufacturers was the principal factor behind the decline, as several plants sold off excess inventories.

The inventory-to-sales ratio decreased from 1.36 in June to 1.33 in July. This was the lowest level since June 2012.

Unfilled orders rose 0.6 percent to C$89.6 billion (US$81.32 billion) in July, following two months of slight declines. Advances in the computer and electronic product, transportation equipment, and primary metal industries were mainly responsible for the increase in July.

Unfilled orders in the computer and electronic product industry advanced 3.9 percent to C$4.3 billion (US$3.9 billion), the sixth consecutive monthly increase and the eighth gain in 10 months.

New orders rose 4.3 percent to C$54.2 billion (US$49.2 billion) in July, mainly as a result of gains in the transportation equipment and primary metal industries.

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