OTTAWA
,
July 15, 2024
(press release)
–
Following a 1.4% increase in April, Canadian manufacturing sales rose 0.4% to $71.4 billion in May, mainly driven by higher production in the aerospace product and parts industry group (+11.2%), followed by higher sales in the food (+1.4%) and paper (+5.5%) product subsectors. Meanwhile, sales of motor vehicles (-4.2%) and petroleum and coal products (-2.2%) decreased the most. Despite the monthly increase, total sales on a year-over-year basis were down 1.8% in May. Sales in constant dollars rose 0.4% in May, while the Industrial Product Price Index was unchanged and the Raw Materials Price Index declined 1.0%. Chart 1: Manufacturing sales Aerospace product and parts industry group posts the largest increase Sales of food products increased 1.4% to $13.0 billion in May, the third-highest level on record. The gain was widespread across all food industry groups, led by seafood (+36.2%), meat (+5.7%), and bakeries and tortilla (+8.9%) manufacturing. Seasonal demand contributed to the increase as sales of food in constant dollars rose 1.1% in May. Following a 5.3% increase in April, sales of motor vehicles fell 4.2% to $4.6 billion in May. A new retooling in an auto assembly plant in Ontario was mainly responsible for the decline. More generally, retooling to electric vehicle production also impacted sales of motor vehicle parts, which declined 1.6% to $3.0 billion in May. Despite lower sales of motor vehicles and parts in May, their exports rose 3.8%, mainly on higher exports of light trucks to the United States. Total sales of motor vehicles on a yearly basis fell 12.5% in May. Sales increase in six provinces In Quebec, sales rose 1.2% to $18.6 billion in May, the fourth consecutive monthly increase. The gain was mainly driven by higher production of aerospace products and parts (+11.7%) as well as sales of non-ferrous metals (+10.2%). Sales in the non-ferrous metal (except aluminum) production and processing industry group in May reached their highest level on record due to higher demand and prices. These two industry groups also largely contributed to the higher sales in Montréal (+1.7%) in May. Year over year, total sales in Quebec rose 6.0% in May. Sales in Ontario increased 0.5% to $31.3 billion in May, mainly on higher sales of food (+3.7%) and plastics and rubber (+5.7%) products. A decline in sales of pharmaceutical and medicine products partly offset the increase. In Toronto, sales were down 3.5% to $12.2 billion in May, mainly attributable to lower sales of chemicals (-17.7%) and motor vehicles (-15.8%). In Saskatchewan, sales fell 13.1% to $1.8 billion in May, primarily driven by a 15.5% decline in sales of non-durable goods. With the monthly decrease in May, total sales in Saskatchewan were 15.5% lower compared with the same month a year earlier. Total inventories edge up Chart 2: Inventory levels edge up in May The inventory-to-sales ratio held steady in May, remaining at 1.70. 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 is the same in May Unfilled orders increase Chart 4: Unfilled orders increase in May Capacity utilization rate increases Chart 5: The capacity utilization rate increases in May 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 July 22. Next release Data from the Monthly Survey of Manufacturing for June will be released on August 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.
Following a 6.1% decrease in April, production of aerospace products and parts rose 11.2% to $2.7 billion in May, the highest level on record. The post-COVID-19 pandemic surge in commercial and business aircraft markets mainly drove demand for aviation industry products in 2023 and remained strong in 2024. Year over year, production in this industry group rose 23.9% in May.
Manufacturing sales increased in six provinces in May, led by Quebec (+1.2%) and Ontario (+0.5%), while Saskatchewan posted the largest decline (-13.1%).
Total inventory levels edged up 0.2% to $121.2 billion in May on higher inventories in 10 of 21 subsectors. Higher goods in process (+1.3%) was responsible for the increase, while finished products declined 0.3% and raw materials were unchanged. Higher inventories of transportation equipment (+2.2%), computers and electronics (+5.4%) and wood products (+2.2%) were partially offset by declines in inventories of chemical products (-2.1%) and primary metals (-1.4%). On a year-over-year basis, total inventories were down 1.4% in May.
Total unfilled orders were up 0.8% to $105.5 billion in May, the second consecutive monthly increase. Higher unfilled orders of other transportation equipment (+16.6%) and machinery (+2.9%) mainly drove the increase.
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector rose from 78.4% in April to 80.4% in May due to higher production. The gain was noticeable in the chemical (+8.2 percentage points), petroleum and coal product (+7.0 percentage points), and plastics and rubber (+5.3 percentage points) subsectors. The capacity utilization rate in the transportation equipment subsector declined 2.6 percentage points in May.
Monthly data in this release are seasonally adjusted and are expressed in current dollars, unless otherwise specified.
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