Monthly Survey of Manufacturing, December 2017
Manufacturing sales declined 0.3% to $55.5 billion in December, following a revised increase of 3.8% in November. The decline was mainly the result of lower sales in the petroleum and coal products industry and the food manufacturing industry.
Overall, sales were down in 11 of 21 industries, representing 57.0% of the manufacturing sector. Sales of non-durable goods decreased 1.3%, while sales of durable goods rose 0.7%.
Once the effects of price changes are taken into account, manufacturing sales in volume terms edged down 0.1% in December.
Petroleum and coal products and food industries post the largest declines
Following five consecutive monthly increases, sales in the petroleum and coal product industry fell 4.1% to $5.7 billion in December, mostly reflecting lower volumes. After removing price effects, sales volumes of petroleum and coal products were down 3.5%.
Sales in the food industry were down 2.6% to $8.5 billion, following a 3.6% increase in November, which was the largest monthly increase in dollars since October 2013. The declines in the food industry were most pronounced in the meat product industry as well as in the dairy product industry.
Sales in current dollars also decreased in the primary metal (-2.0%) and fabricated metal product (-2.3%) industries. Both industries reported sales increases the previous two months. In constant dollars, volumes sold declined by 1.8% and 2.3% respectively in these industries in December.
These declines in current dollars were partially offset by increases in the motor vehicle (+2.6%), machinery (+3.0%), computer and electronic product (+7.4%) and aerospace product and parts (+4.2%) industries.
Sales down in seven provinces
Sales were down in seven provinces in December. New Brunswick and Quebec reported the largest declines, which were partly offset by higher sales in Ontario and Alberta.
Following four consecutive monthly increases, New Brunswick posted the largest decline in dollar terms in December (down 9.2% to $1.7 billion), largely due to lower sales of non-durable goods.
Sales in Quebec declined 1.1% to $13.2 billion, following a 1.5% increase in November. The decline was mostly attributable to lower sales in the primary metal industry (-8.9%), as well as the food industry (-4.2%). These decreases were partly offset by higher sales in the petroleum and coal product industry and the beverage and tobacco product industry.
Sales in Ontario increased 1.2% to $25.7 billion in December. This was the second consecutive month where Ontario recorded the largest monthly gain among the provinces, and was led by higher sales in the transportation equipment (+1.6%), machinery (+5.2%) and primary metal (+4.4%) industries.
In Alberta, sales rose 1.2% to $6.2 billion, the fifth straight monthly increase. Sales were up in 11 of 21 industries, led by the petroleum and coal products (+3.9%), machinery (+6.4%) and primary metal (+14.4%) industries.
Inventory levels edge up
Inventory levels edged up 0.1% from November to $75.3 billion in December. Inventories rose in 8 of the 21 industries, led by the petroleum and coal products (+4.9%) and the other transportation equipment (+10.4%) industries. These gains were partially offset by lower inventories in the railroad rolling stock industry and fabricated metal product industry.
The inventory-to-sales ratio rose from 1.35 in November to 1.36 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 0.7% to $86.0 billion in December, the second consecutive monthly decline. The decrease in December was mainly due to a drop in unfilled orders in the aerospace product and parts industry, as well as the other transportation equipment industry.
New orders were up 0.3% to $54.9 billion in December, following a 2.3% decline in November.
Manufacturing sales rebound in the fourth quarter
Following a 1.8% decrease in the third quarter, manufacturing sales rose 2.8% to $164.8 billion in the fourth quarter, partly on higher sales of petroleum and coal products (+13.1%), mostly due to higher prices. Prices for petroleum and coal products, as measured by the Industrial Product Price Index, increased 9.2% in the fourth quarter of 2017 compared with the previous quarter.
In real (or volume) terms, quarterly sales increased 1.1% to $143.0 billion on higher sales of petroleum and coal products (+3.9%).
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 176-0081. 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 176-0080.
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.
Real-time CANSIM tables
Data from the Monthly Survey of Manufacturing for January will be released on March 16.
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For more information, or to enquire about the concepts, methods or data quality of this release, contact Bechir Oueriemmi (613-951-7938; email@example.com) or Michael Schimpf (613-863-4480; firstname.lastname@example.org), Manufacturing and Wholesale Trade Division.
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