Monthly Survey of Manufacturing, September 2018
Manufacturing sales edged up 0.2% in September to $58.5 billion, following a 0.5% decrease in August.
Sales increased in 8 of 21 industries, led by higher sales in the transportation equipment industry. However, these gains were largely offset by declines in the machinery and wood product industries.
Constant dollar sales edged down 0.1%, indicating a lower volume of goods sold.
Higher sales of transportation equipment industry largely offset by declines in machinery and wood product industries
Sales of transportation equipment increased 3.1% to $11.0 billion in September, following a 1.8% decline in August. The growth was mainly attributable to higher sales in the motor vehicle assembly (+6.1%) and motor vehicle parts (+1.9%) industries, reflecting a ramp up in production following motor vehicle assembly plant shutdowns in July and August. In constant dollars, sales volumes rose 4.8% in the motor vehicle assembly industry and 2.1% in the motor vehicle parts industry in September.
Sales in the chemical (+1.4%) and petroleum and coal product (+0.9%) industries also increased in September. These gains reflected mostly higher prices as volumes sold increased by 0.3% in the chemical industry and by 0.1% in the petroleum and coal product industry.
Sales in the machinery industry fell 6.2% to $3.3 billion in September, following four consecutive monthly increases. Manufacturers in the metalworking machinery industry as well as the agricultural, construction and mining machinery industry reported lower sales in September.
Wood product sales were down for the fourth consecutive month, declining 2.9% to $2.9 billion in September. Many wood product manufacturers indicated that they experienced lower demand and lower prices in the previous four months. Exports of lumber and other sawmill and millwork products were also down in the previous three months.
Sales up in six provinces
Six provinces posted higher manufacturing sales in September, led by Ontario and Newfoundland and Labrador. Decreases in New Brunswick and Manitoba partially offset the increase.
Following a 1.6% decline in August, sales in Ontario rose 0.6% to $26.7 billion in September. This growth was mainly attributable to the motor vehicle (+6.0%), primary metal (+6.3%) and chemical (+3.9%) industries. These increases were partially offset by lower sales in the machinery (-9.4%) and fabricated metal product (-8.1%) industries.
The second largest monthly increase in dollar terms was in Newfoundland and Labrador, where sales rose 21.0% to $648 million in September. This was mostly due to higher sales of non-durable goods and came after a 12.7% decline in August.
In dollar terms, New Brunswick and Manitoba posted the largest sales decreases in September. In New Brunswick, sales fell 9.3% to $1.5 billion, mostly due to lower sales of non-durable goods. Lower sales of durable goods were behind the decrease in Manitoba (-8.8%).
Inventory levels rise
Manufacturing inventories increased 0.3% to $84.1 billion in September. Inventories rose in 12 of 21 industries. Higher inventories in the motor vehicle (+16.9%), primary metals (+1.8%) and chemical (+2.4%) industries contributed to the overall gain. This increase was partly offset by lower inventories in the aerospace product and parts (-1.6%), petroleum and coal products (-2.0%) and food (-1.4%) industries.
The inventory-to-sales ratio was unchanged at 1.44 in September. This 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 increased 0.4% to $95.0 billion in September. This was the eighth consecutive monthly gain. The growth in unfilled orders was attributable to the aerospace product and parts (+1.3%) and machinery (+2.9%) industries.
New orders edged down 0.3% to $58.8 billion in September. There were fewer new orders in the fabricated metal product, other transportation equipment and computer and electronic product industries. The decline was partly offset by higher new orders in the aerospace product and parts industry.
Capacity utilization rate
The capacity utilization rate (not seasonally adjusted) for the manufacturing sector edged down 0.6 percentage points, from 80.6% in August to 80.0% in September. While declines were widespread, the wood product industry had the largest decrease in September. The capacity utilization rate in this industry fell from 83.9% in August to 72.9% in September. Several wood product manufacturers indicated that they received lower orders as demand and construction starts in Canada and the United States declined in September.
The capacity utilization rate for the transportation equipment industry increased for the second consecutive month, rising from 80.8% in August to 85.9% in September. A gradual ramp up of production at some motor vehicle plants after shutdowns in July and August was partly responsible for the increase in September.
The capacity utilization rate of the primary metal industry, which includes aluminum and steel, decreased for the second consecutive month, down 1.2 percentage points to 78.5% in September.
Manufacturing sales increase in the third quarter
Manufacturing sales increased for the fourth consecutive quarter, rising 2.0% to $175.5 billion in the third quarter. The increase was mainly the result of higher sales of petroleum and coal products (+15.2%), mostly due to higher volumes sold. Prices for petroleum and coal products, as measured by the Industrial Product Price Index, increased 1.0% in the third quarter compared with the previous quarter.
In real (or volume) terms, quarterly manufacturing sales increased 1.4% to $159.2 billion on higher sales of petroleum and coal products.
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 sales, inventories and unfilled orders 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 established by the Bank of Canada is used for the conversion. The monthly average exchange rate is available in table 33-10-0163-01. 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 daily average exchange rate on the day selected by the respondent is used. Note that because of exchange rate fluctuations, the daily average 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. Daily average exchange rate data are available in table 33-10-0036-01.
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 data tables
Real-time data tables 16-10-0118-01, 16-10-0119-01, 16-10-0014-01 and 16-10-0015-01 will be updated on November 26.
Data from the Monthly Survey of Manufacturing for October will be released on December 18.
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; firstname.lastname@example.org), Mining, Manufacturing and Wholesale Trade Division.
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