Monthly Survey of Manufacturing, August 2014
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Canadian manufacturing sales fell 3.3% in August to $52.1 billion, the first decline in 2014. The decrease mostly reversed the gains recorded for June and July.
In August, about half of the decrease was caused by lower sales of motor vehicles and motor vehicle parts. Excluding motor vehicles and parts, sales declined 1.9%. Overall, 16 of 21 industries representing about 81% of the manufacturing sector posted declines.
Constant dollar sales decreased 3.7%, indicating that a lower volume of products was sold.
Sales decline in the transportation equipment industry
Transportation equipment sales fell 12.8% to $8.9 billion in August, mostly as a result of lower sales of motor vehicles and motor vehicle parts.
In the motor vehicle industry, sales decreased 12.0% to $4.5 billion. The decline followed stronger than usual sales in July (+13.7%). Unadjusted sales in August, on a year-to-date basis, were 3.5% higher than the same period last year.
Sales in the motor vehicle parts industry were down 10.8% to $2.0 billion in August. The decline was the second in eight months.
Other transportation equipment sales were down 40.6% to $274 million in August, giving back most of the 43.6% gain in July. Sales in this industry are volatile compared with sales for the transportation equipment industry as a whole.
Petroleum and coal product sales declined 3.4% to $7.3 billion, mostly as a result of lower volumes of product sold.
Sales decrease in seven provinces
Sales were down in seven provinces in August, with the bulk of the decrease concentrated in Ontario.
Manufacturing sales in Ontario declined 4.6% to $23.9 billion, essentially reversing the 4.8% advance in July. Declines in the transportation equipment industry were the main cause of the sales drop in the province in August. In particular, sales in the motor vehicle (-12.4%), motor vehicle parts (-11.1%) and aerospace product and parts (-28.5%) industries were lower.
The manufacturing sector in Quebec declined 1.6% to $12.1 billion in August, following three months of gains. The transportation equipment and the petroleum and coal product industries were the main contributors to the decrease.
Manufacturing sales in Alberta decreased 2.8% to $6.7 billion. Lower sales in the petroleum and coal product and chemical industries were the main source of the decline.
Sales in Manitoba declined 9.9% to $1.3 billion in August, following a 14.3% gain in July. The decrease was largely attributable to lower sales in the primary metal and transportation equipment industries.
Total inventories decreased 0.6% to $71.3 billion in August, the second decline in eight months. The decrease was caused primarily by lower inventories in the petroleum and coal product industry, which declined 8.6% to $7.0 billion. Most of the decrease stemmed from lower raw materials held at petroleum refineries. Higher inventories in the primary metal industry offset some of the decline.
The inventory-to-sales ratio rose from 1.33 in July to 1.37 in August. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders edge down
Unfilled orders edged down 0.1% to $89.2 billion in August. Total unfilled orders have been relatively stable over the past six months, after rising 15.3% in February 2014. In August, lower unfilled orders in the primary metal (-6.2%) and machinery (-1.4%) industries were mostly offset by a 0.3% gain in the transportation equipment industry.
New orders were down 3.8% to $52.0 billion in August. About half of the decline was attributable to a decrease in the transportation equipment industry. New orders were also down in the petroleum and coal product, primary metal, machinery, and the computer and electronic product industries.
Note to readers
Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified. For more information on seasonal adjustment, refer to the document Seasonally adjusted data – Frequently asked questions.
With this release, data have been revised for the previous three 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.
Manufacturers reporting 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 (noon spot rate) established by the Bank of Canada is used for the conversion. The monthly average exchange rate is available on CANSIM Table 176-0064.
Inventories and unfilled orders are reported at the end of the reference period. Therefore, for these variables, the noon spot exchange rate on the last working day of the month is used for the conversion. The noon spot exchange rate is available on CANSIM Table 176-0067. Note that because of exchange rate fluctuations, the monthly average exchange rate can differ substantially from the exchange rate on the last working day of the month.
Data from the September Monthly Survey of Manufacturing will be released on November 14.
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To enquire about the concepts, methods or data quality of this release, contact Michael Schimpf (613-951-9832; firstname.lastname@example.org), Manufacturing and Wholesale Trade Division.