Monthly Survey of Manufacturing, February 2020
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Manufacturing sales in February were affected by rail blockades in different parts of the country, as well as by COVID-19, particularly on global supply chains.
Overall, manufacturing sales increased 0.5% to $56.2 billion in February, following five consecutive monthly decreases. The growth was mainly due to higher sales in the transportation equipment industry.
Sales increased in 11 of 21 industries, representing 58.4% of total Canadian manufacturing.
Constant dollar sales were up 0.8%, indicating that a higher volume of products was sold in February.
Rail blockades and COVID-19 dampen sales
At the national level, the impact of the rail blockades and COVID-19 disruptions in February lowered total manufacturing sales (seasonally adjusted) by an estimated $465 million (-0.8%), according to respondents. Without these disruptions, total manufacturing sales would have risen by an estimated 1.3% in February compared with the figure in January.
Overall, an estimated 11.9% of establishments in the manufacturing sector reported that their activities were impacted by rail blockades in February. The primary metal (31.4%), chemical (24.0%), wood products (21.6%), petroleum and coal (15.8%), non-metallic mineral product (15.5%) and food (13.1%) industries were the most affected by rail blockades in February. For these industries, the blockades contributed to delays in receiving their raw materials, as well as slowing down movement of products to market.
In February, an estimated 9.2% of establishments in the manufacturing sector reported that their activities were impacted by the novel coronavirus (COVID-19). Textile mills (38.8%), petroleum and coal product (22.1%), electric equipment appliance and components (20.6%) and computer and electronic products (20.6%) industries reported that COVID-19 had affected their activities. Some manufacturers indicated that they had not received raw materials on time from China.
Several Canadian manufacturers indicated that COVID-19 had some impact on their activities because they experienced an increase in the cost of raw materials coming from other countries. They also indicated a decline in sales to China in February and expected the March decline will be larger.
For February, on an unadjusted basis, the largest estimated impacts on sales in dollar terms were in the machinery (-$66 million), primary metal (-$53 million), fabricated metal product (-$50 million), wood product (-$49 million), food (-$49 million), chemical (-$45 million), petroleum and coal product (-$36 million), and computer and electronic product (-$32 million) industries. However, it was very difficult for respondents to provide us with separate estimates of the effects of the rail blockades, COVID-19, or other events on their businesses. Note that these estimated impacts should be interpreted cautiously. They provide a sense of the estimated extent to which the disruptions lowered sales below what they would otherwise have been.
Transportation equipment industry posts the largest increase
Sales in the transportation equipment industry grew 4.0% to $10.4 billion in February, following two consecutive monthly declines. This gain was due to increases in the motor vehicle (+13.3%) and motor vehicle parts (+2.6%) industries. The increase in motor vehicle sales was the result of more units produced at some assembly plants, particularly those that had shutdowns in January.
In February, sales also increased in the plastics and rubber products (+4.3%), fabricated metal product (+1.9%), computer and electronic product (+5.2%) and chemical (+1.3%) industries.
These increases were partially offset by declines in the machinery (-6.0%), aerospace product and parts (-9.3%), petroleum and coal product (-2.2%) and food (-1.0%) industries.
Sales up in four provinces
Sales were up in four provinces, though the increase was concentrated in Ontario.
Following two months of declines, sales in Ontario rose 3.0% to $26.1 billion in February. This mainly reflected higher sales in the motor vehicle (+15.0%), fabricated metal product (+6.2%), computer and electronic products (+14.5%) and machinery (+4.7%) industries.
Manufacturing sales in British Columbia increased 3.7% to $4.3 billion in February. The gain was mostly attributable to higher sales in the wood product, non-metallic mineral product, fabricated metal product and paper industries.
Sales in Quebec declined 3.2% to $13.8 billion, as 14 of 21 industries reported lower sales. The largest decreases were in the machinery (-20.8%), transportation equipment (-6.7%) and non-metallic mineral product (-17.1%) industries. Both durable and non-durable goods declined in February.
Manufacturing sales in census metropolitan areas
Manufacturing sales on an unadjusted basis fell in 10 of 12 census metropolitan areas (CMAs) in February, led by Montréal (-3.9%) and Edmonton (-7.8%).
In Montréal, lower sales in the transportation equipment, machinery, petroleum and coal product, and chemical industries were behind the decline in February.
Manufacturing sales in Edmonton were down 7.8% to $2.8 billion in February due to lower sales in the petroleum and coal product, machinery, and fabricated metal product industries.
In Toronto, manufacturing sales rose 4.0% to $9.7 billion in February, largely reflecting higher sales of motor vehicles.
Inventory levels decrease
Inventory levels declined 1.0% to $86.9 billion in February, following a 0.9% increase in the previous month. Inventories were down in 16 of 21 industries, led by petroleum and coal product (-4.3%), chemical (-3.0%), primary metal (-1.6%) and furniture and related product (-7.8%) industries. These decreases were partly offset by increases in the transportation equipment (+1.0%) and fabricated metal product (+1.8%) industries.
The inventory-to-sales ratio decreased from 1.57 in January to 1.55 in February, mostly due to lower durable goods inventories. 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 unchanged
Unfilled orders were unchanged at $97.5 billion in February. The largest increase in unfilled orders was posted by the transportation equipment industry, followed by the fabricated metal product industry. These gains were offset by a decline in the primary metal industry, as well as in the machinery industry.
New orders decreased 0.5% to $56.2 billion as a result of lower orders in the machinery and aerospace product and parts industries.
Capacity utilization rate
The unadjusted capacity utilization rate for the manufacturing sector increased slightly from 76.9% in January to 77.0% in February.
Following two consecutive monthly declines, the capacity utilization rate for the non-metallic mineral product industry increased 8.1 percentage points to 70.0% in February. The increase was mostly attributable to higher production in the glass and glass product as well as cement and concrete product manufacturing industries.
The capacity utilization rate for the transportation equipment industry rose 4.3 percentage points to 82.7% in February. The increase was mostly attributable to higher production at motor vehicle assembly plants.
The capacity utilization rate of the petroleum and coal product industry declined for a second consecutive month, falling 5.9 percentage points to 77.0% in February. The decrease was partly attributable to lower deliveries of crude oil to several different refineries across Eastern and Central Canada.
Estimates of impact of COVID-19 and railway blockades on manufacturing sales by industry – Unadjusted
Estimates of impact of COVID-19 and railway blockades on manufacturing sales: provinces – Unadjusted
Sustainable Development Goals
On January 1, 2016, the world officially began implementation of the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the next 15 years. The plan is based on 17 specific sustainable development goals.
The Monthly Survey of Manufacturing is an example of how Statistics Canada supports the reporting on the Global Goals for Sustainable Development. This release will be used in helping to measure the following goal:
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.
Once per year, a revision project is undertaken and data for several years are revised.
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 April 27.
Data from the Monthly Survey of Manufacturing for March will be released on May 14.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
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