Canadian manufacturing sales edged up 0.4% to C$50.9B in March from February, the sixth advance in seven months, driven mostly by higher sales in food, machinery, and plastics and rubber products industries: Statistics Canada

OTTAWA , May 15, 2014 (press release) – Canadian manufacturing sales edged up 0.4% to $50.9 billion in March, the sixth advance in seven months. The rise mostly reflected higher sales in the food, machinery, and plastics and rubber products industries. However, these increases were largely offset by declines in the paper, and petroleum and coal products industries.

Sales were up in 11 of 21 industries, representing approximately two-thirds of the manufacturing sector. Both durable and non-durable goods sales increased 0.4%.

Constant dollar sales increased 0.5%, indicating a rise in the volume of goods sold.

Chart 1 
Manufacturing sales increase
Line chart – Chart 1: Manufacturing sales increase, from March 2009 to March 2014

Chart description: Manufacturing sales increase

CSV version of chart 1

Sales rise in the food industry

In the food industry, sales rose 2.1% to $7.8 billion in March, as a result of widespread increases. The largest sales gains were posted by the meat and dairy sub-industries.

Machinery sales increased 3.3% to $3.1 billion in March. In the plastics and rubber products industry, sales advanced 2.7% to $2.1 billion.

Offsetting these increases were a 3.8% decrease in the paper products industry and a 0.8% decline in the petroleum and coal product industry. Some respondents in the paper products industry reported that the decrease in sales was the result of a strike at the Port Metro Vancouver.

Sales rise in five provinces

Sales increased in five provinces in March, led by gains in Quebec, Ontario and Alberta.

A 2.0% rise in sales in Quebec stemmed largely from a 19.9% increase in production in the aerospace product and parts industry. Production in this industry tends to be volatile. Gains in sales were also reported in the primary metal and food industries.

Ontario manufacturers reported a 0.6% increase in sales as a result of the petroleum and coal product, and food industries. Sales of petroleum and coal products were up 7.1%, while food industry sales advanced 2.5% in March.

Alberta sales rose 1.7% in March, reflecting gains in the food and machinery industries.

These increases were partially offset by declines in New Brunswick, Saskatchewan and Newfoundland and Labrador. Lower sales of petroleum and coal products, food, and machinery were reported across these provinces.

Petroleum and coal products behind the increase in inventories

Inventories edged up 0.2% to $71.6 billion, a third consecutive increase. Petroleum and coal products led the advance in March. The paper, wood and food industries also contributed to the rise. Lower inventories in the aerospace product and parts industry partially offset the gains.

In the petroleum and coal products industry, inventories rose 4.5%, reflecting higher levels of raw materials (+19.0%). The increase was partly related to a rise in the price of conventional crude oil, up 12.6% from December according to the Raw Materials Price Index.

Inventories increased 4.9% in the paper industry and 3.3% in the wood product industry. Some manufacturers in the paper industry reported lower sales and higher inventories, in part due to the Port Metro Vancouver strike. Food products also played a part in the overall increase, up 1.6%, the fourth consecutive gain for the industry.

Aerospace products and parts were down 2.2% from their record high in February. This decline offset part of the growth in inventories.

Chart 2 
Inventories edge up
Line chart – Chart 2: Inventories edge up, from March 2009 to March 2014

Chart description: Inventories edge up

CSV version of chart 2

The inventory-to-sales ratio was unchanged at 1.41 in March. The 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 flat
Line chart – Chart 3: The inventory-to-sales ratio is flat, from March 2009 to March 2014

Chart description: The inventory-to-sales ratio is flat

CSV version of chart 3

Unfilled orders decline

Unfilled orders fell 0.8% to $89.4 billion, following a 15.4% gain in February. The decrease in March was mostly caused by a 0.8% drop in the transportation equipment industry. Unfilled orders in the transportation equipment industry represent almost three-quarters of total orders.

Chart 4 
Unfilled orders decline
Line chart – Chart 4: Unfilled orders decline, from March 2009 to March 2014

Chart description: Unfilled orders decline

CSV version of chart 4

New orders fell 19.9% to $50.2 billion in March, as they returned to normal levels after a jump in February. New orders are derived by adding sales to the monthly change in unfilled orders.

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