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Monthly Survey of Manufacturing, January 2018

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Released: 2018-03-16

Manufacturing sales decreased 1.0% to $54.9 billion in January. Declines in the motor vehicles, the aerospace product and parts, as well as the primary metal industries were responsible for the overall drop.

Overall, sales were down in 14 of 21 industries, representing 56% of the Canadian manufacturing sector. Sales of durable goods declined 3.5% to $28.2 billion, while sales of non-durable goods increased 1.7% to $26.8 billion.

Chart 1  Chart 1: Manufacturing sales decline
Manufacturing sales decline

In constant dollars, manufacturing sales in volume terms declined 1.1%.

The motor vehicle, aerospace product and parts, and primary metal industries post the largest declines

Sales of motor vehicles fell 8.0% to $4.9 billion, following two consecutive monthly increases. The decrease reflected mostly lower production because of atypical assembly plant shutdowns. In constant dollar terms, sales in the motor vehicle industry declined 7.5% in January, indicating that the decline in current dollars is mainly due to a reduction in volumes produced.

Production in the aerospace product and parts industry decreased 9.5% to $1.6 billion, following 4.4% increase in December. The January decline was partly due to the increase in the value of the Canadian dollar relative to the US dollar. Sales and inventories are used to calculate production in the aerospace industry and most inventories in the industry are held in US dollars.

Sales in the primary metal industry fell 2.8% to $4.1 billion, the second consecutive monthly decline. In constant dollars, sales in the primary metal industry were down 2.7%, indicating lower volumes of products were sold.

Decreases were also seen in the wood product (-4.1%), machinery (-3.1%) and paper (-4.0%) industries.

Partly offsetting these declines in current dollars were increases in the petroleum and coal product and the chemical industries. Sales in the petroleum and coal product industry were up 6.5% to $6.1 billion, the sixth gain in the last seven months and reflecting higher prices. After removing the effect of price changes, the volume of sales rose 2.2% in January.

Chemical manufacturing sales rose 6.1% to $4.7 billion, reflecting higher volume sales among several chemical manufacturing industries, particularly the pesticide, fertilizer and the other agricultural chemical, as well as the pharmaceutical and medicine manufacturing industries. In constant dollars, sales in the chemical industry increased 6.1% in January.

Sales down in five provinces

Sales fell in five provinces in January, with Ontario posting the largest decline in dollars.

Following two consecutive monthly increases, sales in Ontario fell 2.3% to $25.2 billion. The decline was mainly attributable to lower sales in the motor vehicle (-8.3%), primary metals (-8.5%) and motor vehicle parts (-3.9%) industries.

The largest monthly increase was in Saskatchewan, where sales rose 5.7% to $1.4 billion. The growth was mainly attributable to higher sales of non-durable goods.

In Alberta, sales rose 1.1% to $6.3 billion, the sixth consecutive monthly increase. This was their highest level since December 2014 and largely attributable to higher sales in the petroleum and coal product (+5.4%) and chemical (+6.4%) industries.

Inventory levels increase

Inventory levels rose 0.9% to $76.1 billion in January, the fourth consecutive monthly gain, to reach their highest level since the current series began in 1992.

Chart 2  Chart 2: Inventory levels increase
Inventory levels increase

The largest inventory increase occurred in the petroleum and coal product (+5.7%), chemical (+2.3%), transportation equipment (+0.9%) and computer and electronic product (+5.1%) industries.

Partially offsetting the increases was a 2.1% decline in inventories in the fabricated metal product industry.

Chart 3  Chart 3: The inventory-to-sales ratio increases
The inventory-to-sales ratio increases

The inventory-to-sales ratio rose from 1.36 in December to 1.39 in January. 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 increase

Unfilled orders rose 0.6% to $86.7 billion in January, following two months of declines. Most of the gain came from a 1.6% increase in the aerospace product and parts industry. Unfilled orders were also up in the primary metal and in the computer and electronic product industries.

Chart 4  Chart 4: Unfilled orders increase
Unfilled orders increase

New orders rose for a second consecutive month, edging up 0.1% to $55.4 billion in January. The gain mostly reflected an increase in new orders in the aerospace product and parts and in the petroleum and coal product industries.




  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.

Production-based industries

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.

Revision policy

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

Real-time CANSIM tables 304-8014, 304-8015 and 377-8009 will be updated on March 26. For more information, consult the document Real-time CANSIM tables.

Next release

Data from the Monthly Survey of Manufacturing for February will be released on April 17.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Bechir Oueriemmi (613-951-7938; bechir.oueriemmi@canada.ca) or Michael Schimpf (613-863-4480; michael.schimpf@canada.ca), Manufacturing and Wholesale Trade Division.

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