Monthly Survey of Manufacturing, December 2016
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Manufacturing sales increased for the second consecutive month, up 2.3% to $53.5 billion in December, following a revised increase of 2.3% in November. The growth was mainly the result of higher sales of transportation equipment, as well as petroleum and coal products.
Overall, sales were up in 8 of 21 industries, representing 41% of the manufacturing sector. Sales of durable goods rose 2.4%, while sales of non-durable goods increased 2.1%.
In constant dollars, sales were up 2.3%, indicating that higher volumes of manufactured goods were sold in December.
The transportation equipment and the petroleum and coal products industries post the largest gains
Sales of transportation equipment rose 7.4% to $11.2 billion in December, following two consecutive monthly decreases. Much of the increase in December was attributable to a sharp gain in sales of other transportation equipment, which totalled $489 million, and to higher sales in the motor vehicle parts (+7.1%) and motor vehicle assembly (+2.8%) industries. Growth in the motor vehicle parts and motor vehicle assembly industries partly reflected higher sales in the domestic market. The increase in the transportation equipment industry accounted for 65% of the total gain in manufacturing sales.
Sales in the petroleum and coal products industry were up 11.6% to $5.2 billion, their highest level since July 2015. Growth in December was largely attributable to higher volumes at a number of refineries that resumed production following maintenance and retooling work in September and October. Petroleum product prices increased 5.4% in December, according to the Industrial Product Price Index.
Sales fell in 13 industries in December, with computer and electronic products manufacturing recording the sharpest decline, down 5.0% to $1.1 billion.
Ontario and Quebec lead sales increases
Sales grew in six provinces in December, but growth was concentrated in Ontario and Quebec.
Sales were up 2.3% in Ontario to $25.6 billion in December, the second monthly gain in a row. Growth in December was mainly attributable to a 5.9% rise in sales in the transportation equipment industry. Higher sales were also recorded in the petroleum and coal products, food and fabricated metal products industries. These increases were partially offset by lower sales in the computer and electronic products industry (-7.3%) and primary metals industry (-3.3%).
In Quebec, sales rose 4.1% to $12.8 billion in December, their highest level since July 2008. Sales increased 22.1% in the transportation equipment industry, accounting for more than half of the growth in the province. The petroleum and coal products industry and primary metals industry also recorded gains. These increases were partially offset by a 2.0% decline in the food industry.
Sales in Manitoba fell 4.5% to $1.5 billion in December, following two consecutive monthly gains. The decline was mainly attributable to lower sales of durable goods.
Inventory levels fall
Inventories were down 0.3% to $69.6 billion in December, the third consecutive monthly decrease.
Inventories fell in 11 of the 21 industries. The aerospace products and parts industry (-4.4%) and the motor vehicles industry (-8.5%) recorded the sharpest declines. These decreases were partially offset by a 9.2% increase in petroleum and coal product inventories.
The inventory-to-sales ratio declined from 1.34 in November to 1.30 in December. 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 decline
Unfilled orders fell 1.9% to $87.7 billion in December, the second consecutive monthly decline. The decrease in December was mainly due to a drop in unfilled orders in the aerospace products and parts industry, as well as the computer and electronic products industry.
These declines were partially offset by an increase in unfilled orders in the machinery industry.
New orders were down 0.6% to $51.8 billion in December, following three consecutive monthly gains. There was a decline in new orders in the aerospace products and parts industry, as well as the computer and electronic products industry.
Historical perspective on the Canadian manufacturing sector
As 2017 marks the 150th anniversary of Canadian Confederation, The Daily will feature monthly highlights of the evolution of Canada's manufacturing sector.
Total sales in Canada's manufacturing sector were valued at $21.4 billion in 1958, the first year for which industry level data are available. By comparison, manufacturing sales totalled $614.4 billion in 2016. In 1958, the food and beverage industry (21.3%) accounted for the largest share of manufacturing sales, followed by primary metals (10.3%) and transportation equipment (9.7%). In 2016, the transportation equipment industry (21.2%) represented the largest share of manufacturing sales, followed by the food industry (16.4%) and petroleum and coal products industry (8.4%).
Note to readers
Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified. For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
For information on trend-cycle data, see Trend-cycle estimates – Frequently asked questions.
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 metals, 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 and shipbuilding industries, 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 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 in CANSIM table 176-0064.
Inventories and unfilled orders are reported at the end of the reference period. For most respondents, the noon spot 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 day of the month. In these instances, the noon spot exchange rate on the day selected by the respondent is used. Note that because of exchange rate fluctuations, the noon spot 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. Noon spot exchange rate data are available in CANSIM table 176-0067.
Each month, the Monthly Survey of Manufacturing releases preliminary data for the reference month and revised data for the three previous 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. During annual revisions, changes are made to seasonal adjustment parameters.
Real-time CANSIM tables
Data from the Monthly Survey of Manufacturing for January will be released on March 17.
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