Monthly Survey of Manufacturing
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Manufacturing sales declined 0.9% to $49.6 billion in January, the second decrease in seven months. The decrease partly reflected a drop in production in the aerospace product and parts industry. Lower sales in the primary metals, machinery and other transportation equipment industries also contributed to the overall decline. Excluding the aerospace industry, sales were virtually unchanged from December.
Sales decreased in 11 of 21 industries representing approximately 44% of Canadian manufacturing. Sales of durable goods fell 2.4% while those of non-durable goods rose 0.6%.
Constant dollar manufacturing sales fell 1.1% in January, reflecting a decrease in the volume of manufactured goods. This was the first decline in constant dollar sales in three months.
Manufacturing sales decline
Aerospace product and parts posts largest decline
Production in the aerospace product and parts industry dropped 34.0% to $913 million in January, the third decrease in four months.
Note to readers
All data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.
Preliminary data are provided for the current reference month. Revised data, based on late responses, are updated for the three previous months.
Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, 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 metal, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.
For the aerospace industry and shipbuilding industries, the value of production is used instead of sales of goods manufactured. This value is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured.
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.
Manufacturing sales in the primary metal industry were down 3.5% to $4.1 billion, despite a 1.8% rise in prices as indicated by the Industrial Product Price Index. The declines were concentrated in alumina and aluminum production and processing as well as non-ferrous metal production and processing. Notwithstanding the decline, sales were 4.9% higher than in January 2011.
In January, machinery manufacturers reported a 4.5% decline in sales to $3.0 billion, the second consecutive decline. Lower sales were widespread in the industry. Sales in January were at their third-highest level since the series began.
Automobile industry continues to strengthen
Higher sales in the motor vehicle (assembly) and motor vehicle parts industries offset a portion of the overall decline in manufacturing in January.
Sales in the motor vehicle (assembly) industry rose 2.6% to $4.5 billion, the seventh consecutive month of sales increases. Sales in the industry have grown 37.4% since June 2011, the most recent low. In January 2012, sales in the industry were at their highest level since November 2007.
Similarly, sales in the motor vehicle parts industry advanced 6.2% in January to $2.1 billion, the fifth consecutive monthly increase. Most motor vehicle parts manufacturers reported higher sales.
During the three month period following the March 2011 Japanese tsunami, Canadian motor vehicle (assembly) sales fell 11.6% to their June 2011 low of $3.3 billion. For the same period, motor vehicle (assembly) sales in the United States decreased 3.4%. Since June 2011, sales in the Canadian industry have advanced 37.4%, a stronger gain than was recorded for the US industry (+6.4%).
Sales in the combined motor vehicle parts and motor vehicle body and trailer industries in Canada and the United Sales also declined in the months following the tsunami. Combined sales in Canada for the two industries decreased 3.8% from March to a low of $1.8 billion in May 2011. Since then, combined sales have gained 33.6% to $2.4 billion in January 2012. Total sales for the equivalent industries in the US rose 4.0% over the same period.
Largest sales decrease in Quebec
Sales declined in five provinces in January, with Quebec posting the largest decrease in dollar terms.
Sales in Quebec declined 3.9% to $11.6 billion, the first decrease following four months of gains. A 37.3% drop in production in the aerospace product and parts industry was largely responsible for the provincial decrease. Lower sales in the plastics and rubber products (-15.3%) and machinery (-10.9%) industries also contributed to the overall decline. The decreases were partly offset by a 6.2% gain in the petroleum and coal products industry.
In New Brunswick, sales decreased 5.1% to $1.5 billion, the fourth consecutive monthly decline. A decline in non-durable goods sales was responsible for most of the provincial decrease.
Ontario's manufacturing sales edged down 0.3% to $22.9 billion, with 9 of 21 industries posting lower sales. Sales were down 8.8% in the primary metal industry. Sales declines also occurred in the machinery (-6.4%) and petroleum and coal products industries (-4.5%). Gains in the food (+4.3%), motor vehicle (assembly) (+3.3%) and motor vehicle parts (+5.8%) industries offset most of the decreases.
In Nova Scotia, a 7.6% advance in sales partly reflected gains in the non-durable goods industries. A 2.0% gain in British Columbia largely stemmed from higher sales in the primary metals (+12.5%) and wood products (+5.3%) industries. Sales in Alberta rose 0.9%, reflecting increases in 16 of 21 industries; lower sales in the food industry offset a portion of the gains.
Inventory levels rise
Inventories rose 1.1% in January to $65.3 billion, the 15th gain in 16 months. Inventories were up in 19 of 21 industries.
Inventory levels in the transportation equipment industry increased 2.9%, largely reflecting a 5.6% gain in the aerospace product and parts industry.
In the primary metal industry, inventories increased 1.9%. Higher levels of raw material and finished product inventories were responsible for the overall increase.
Computer and electronic product inventories advanced 4.0%, largely reflecting a rise in raw materials on hand (+5.0%).
A 4.0% decline in inventories of petroleum and coal products offset a portion of the gains. The decrease in the industry stemmed from an 8.8% decline in raw material inventories and a 5.9% decline of goods-in-process.
Inventory levels rise
The inventory-to-sales ratio advanced to 1.32 in January from 1.29 in December. 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.
The inventory-to-sales ratio increases
Unfilled orders edge downward
Unfilled orders edged down 0.2% to $60.6 billion. Since September 2011, unfilled orders have been relatively stable.
In January, a decrease in the aerospace product and parts industry was mostly responsible for the decline. Excluding the aerospace product and parts industry, unfilled orders rose 0.6%. In the aerospace product and parts industry, unfilled orders declined 1.0% to $28.9 billion. The decline reflected a higher value for the Canadian dollar relative to the American dollar in January, as a large portion of unfilled orders in the aerospace industry are held in US dollars.
Gains in unfilled orders were led by the computer and electronic products industry and the electrical equipment, appliance and component industry.
Unfilled orders edge downward
New orders increased 0.8% in January to $49.5 billion, reflecting gains in 13 industries. A drop in the aerospace product and parts industry offset most of the gains.
Table 304-0014: Canada data (sales, inventories, orders) by industry.
Table 304-0015: Provincial sales by industry.
Table 377-0008: Constant dollar sales, inventories and orders.
Definitions, data sources and methods: survey number 2101.
Data from the February Monthly Survey of Manufacturing will be released on April 17.
For more information, or to order data, contact the dissemination officer (toll-free 1-866-873-8789; 613-951-9497; fax: 613-951-3877; firstname.lastname@example.org). To enquire about the concepts, methods or data quality of this release, contact Michael Schimpf (613-951-9832, email@example.com), Manufacturing and Energy Division.
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