OTTAWA
,
August 16, 2024
(press release)
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Manufacturing sales decreased 2.1% to $69.6 billion in June, on declines in 17 of 21 subsectors, led by the transportation equipment (-2.9%), chemical product (-5.8%) and primary metal (-2.7%) subsectors. On a quarterly basis, total sales fell 0.3% in the second quarter of 2024, the third consecutive quarterly decline. The decline in the second quarter was driven by lower sales in the petroleum and coal product subsector (-4.0%) as well as the motor vehicle industry group (-3.8%). On a year-over-year basis, total sales decreased 1.8% in June. Total sales in constant dollars fell 2.1% in June, while the industrial product price index was unchanged. Chart 1: Manufacturing sales Sales of motor vehicle parts lead decline in transportation equipment In the aerospace product and parts industry group, production decreased 2.9% to $2.6 billion in June, after it reached its highest level on record in May. Despite the monthly decline, production of aerospace products and parts was up 1.8% in the second quarter. Sales of chemical products fell 5.8% to $5.2 billion in June, the second consecutive monthly decline and the lowest level recorded since June 2021. The decline was driven by lower sales of pesticide, fertilizer and other agricultural chemicals. Sales of fertilizers typically decline in June, following the planting season in May. Prices of fertilizers, pesticides and other agricultural chemical products decreased 0.1% in June 2024. On a yearly basis, total sales of chemical products declined 4.6% in June, while they were down 1.1% in the second quarter. Following three consecutive monthly increases, sales of primary metals declined 2.7% to $5.5 billion in June, mainly attributable to lower sales of non-ferrous metal (except aluminum) production and processing. Sales of primary metals in constant dollars declined 2.9% in June. Several shutdowns at some Canadian non-ferrous metal plants contributed to the lower sales observed in June. The prices for several non-ferrous metals declined in June, including unwrought nickel and nickel alloys (-10.3%) as well as unwrought copper and copper alloys (-4.5%). Despite the monthly decline in June, sales of primary metals on a quarterly basis (+4.7%) marked the largest increase among the 21 subsectors in the second quarter. Sales decline in eight provinces in June, led by Quebec In Quebec, sales decreased 3.2% to $17.8 billion in June, largely on lower sales of primary metals (-7.4%) and fabricated metal products (-9.2%). The decline in the primary metal subsector was the main contributor to the 5.7% decrease in total sales in Montréal. Despite the month-over-month decline, total sales in Quebec were up 3.8% compared with June 2023 and increased 1.6% in the second quarter of 2024. Following two consecutive monthly increases, sales in Ontario fell 1.7% to $30.7 billion in June, driven by lower sales of motor vehicle parts (-5.9%) and machinery (-5.5%). Sales in Ontario were 7.1% lower on a yearly basis in June, while they declined 1.2% over the second quarter. In Alberta, sales fell 2.5% to $8.4 billion in June, mainly on lower sales in the chemical product (-7.3%) and machinery (-11.6%) subsectors. Lower sales of chemical products also contributed to the 0.5% decline in total sales in Edmonton. Despite the monthly decline, sales in Alberta were up 6.5% year over year in June and rose 0.5% over the second quarter. Total inventories edge up Chart 2: Inventory levels edge up The inventory-to-sales ratio increased from 1.70 in May to 1.74 in June. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level. Chart 3: The inventory-to-sales ratio rises Unfilled orders decrease Chart 4: Unfilled orders decrease in June Capacity utilization rate increases Chart 5: The capacity utilization rate increases in June Note to readers Seasonally adjusted data are data that have been modified to eliminate the effect of seasonal and calendar influences to allow for more meaningful comparisons of economic conditions from period to period. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions. Trend-cycle estimates are included in selected charts as a complement to the seasonally adjusted series. These data represent a smoothed version of the seasonally adjusted time series and provide information on longer-term movements, including changes in direction underlying the series. For information on trend-cycle data, see Trend-cycle estimates – Frequently asked questions. Both seasonally adjusted data and trend-cycle estimates are subject to revision as additional observations become available. These revisions could be large and could even lead to a reversal of movement, especially for reference months near the end of the series or during periods of economic disruption. Non-durable goods industries include food; beverage and tobacco products; textile mills; textile product mills; apparel; leather and allied products; paper; printing and related support activities; petroleum and coal products; chemicals; and plastics and rubber products. Durable goods industries include wood products; non-metallic mineral products; primary metals; fabricated metal products; machinery; computer and electronic products; electrical equipment, appliances and components; transportation equipment; furniture and related products; and miscellaneous manufacturing. Production-based industries For the aerospace and shipbuilding industry groups, the value of production is used instead of the value of sales of goods manufactured. The value of production is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured. The value of production is used because of the extended period of time that it normally takes to manufacture products in these industries. Unfilled orders are a stock of orders that will contribute to future sales, assuming that the orders are not cancelled. New orders are those received, whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month. Manufacturers reporting sales, inventories and unfilled orders in US dollars Some Canadian manufacturers report sales, inventories and unfilled orders in US dollars. These data are then converted to Canadian dollars as part of the data production cycle. For sales, based on the assumption that they occur throughout the month, the average monthly exchange rate for the reference month established by the Bank of Canada is used for the conversion. The monthly average exchange rate is available in table 33-10-0163-01. Inventories and unfilled orders are reported at the end of the reference period. For most respondents, the daily average exchange rate on the last working day of the month is used for the conversion of these variables. However, some manufacturers choose to report their data as of a day other than the last working day of the month. In these instances, the daily average exchange rate on the day selected by the respondent is used. Note that because of exchange rate fluctuations, the daily average exchange rate on the day selected by the respondent can differ from both the exchange rate on the last working day of the month and the monthly average exchange rate. Daily average exchange rate data are available in table 33-10-0036-01. Revision policy Each month, the Monthly Survey of Manufacturing releases preliminary data for the reference month and revised data for the previous three months. Revisions are made to reflect new information provided by respondents and updates to administrative data. Once a year, a revision project is undertaken to revise multiple years of data. Real-time data tables Real-time data tables 16-10-0118-01, 16-10-0119-01, 16-10-0014-01 and 16-10-0015-01 will be updated on August 23. Next release Data from the Monthly Survey of Manufacturing for July will be released on September 16. Contact information Industry Intelligence Editor's Note: This press release omits select charts and/or marketing language for editorial clarity. Click here to view the full report. 
Sales in the transportation equipment subsector declined 2.9% to $11.0 billion in June, following two consecutive monthly increases. The decline was widespread, as six of seven industry groups posted lower sales, led by motor vehicle parts (-5.6%) and aerospace product and parts (-2.9%). Retooling in some auto assembly plants in the United States impacted major motor vehicle parts production in Canada and was partially responsible for the lower sales in this industry group. The exports of motor vehicles and parts declined 3.9% in June.
Manufacturing sales fell in eight provinces in June. The largest declines were posted in Quebec, Ontario and Alberta, while the largest increase was in New Brunswick.
Total inventory levels edged up 0.1% to $121.1 billion in June, on higher inventories in 13 of 21 subsectors, led by chemical (+6.6%) and wood products (+1.6%). The gains were partially offset by lower inventories in the transportation equipment (-2.6%) and miscellaneous manufacturing (-9.9%) subsectors. Higher inventories of finished products (+2.3%) were partially offset by lower raw materials (-0.9%) and goods in process (-1.0%) inventories.
Total unfilled orders fell 0.8% to $105.1 billion in June, primarily on lower unfilled orders in the aerospace product and parts industry group (-1.4%).
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector rose from 79.7% in May to 80.2% in June, mainly on higher capacity utilization rates in the petroleum and coal product (+5.2 percentage points) and transportation equipment (+4.1 percentage points) subsectors. The increase was partially offset by lower capacity utilization rates in the chemical (-3.4 percentage points) and primary metal (-1.6 percentage points) subsectors.
Monthly data in this release are seasonally adjusted and are expressed in current dollars, unless otherwise specified.
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