Monthly Survey of Manufacturing, May 2020
Manufacturing sales increased 10.7% to $40.2 billion in May following a record 27.9% decline in April, as many manufacturers resumed operations following full or partial shutdowns related to COVID-19 during the previous month. Nevertheless, total manufacturing sales in May were 28.4% below their pre-pandemic level in February.
Sales were up in 18 of 21 industries, led by motor vehicle, motor vehicle parts and petroleum and coal products industries.
In volumes terms, manufacturing sales rose 8.8%, indicating a higher volume of products sold in May.
Four-fifths of manufacturers report that COVID-19 has affected their operations
Feedback from respondents highlights the impact of the COVID-19 pandemic on sales in May.
Four-fifths (80.9%) of establishments in the manufacturing sector reported that their activities were affected by COVID-19. Manufacturers in the miscellaneous (92.6%), printing and related product (91.6%), clothing (90.4%), furniture and related product (89.6%), leather and allied product (89.0%) and textile mills (88.7%) industries reported operating at limited capacity because of lower orders from regular customers as many retail stores remained closed.
One-quarter (24.3%) of establishments reported that they have a recovery plan in place.
Based on respondent feedback, the largest estimated impacts of COVID-19 on manufacturing sales in dollar terms were in the transportation equipment (-$6.7 billion), petroleum and coal product (-$1.8 billion), fabricated metal product (-$836 million), food (-$806 million), plastic and rubber product (-$791 million), machinery (-$760 million) and primary metal (-$710 million) industries. Note that these estimates are on an unadjusted basis. However, they provide a snapshot of the magnitude to which COVID-19 may have lowered sales.
Assembly plants and motor vehicle parts suppliers resume production
Sales in the transportation equipment industry rose 81.7% to $3.6 billion in May, partially recovering from the record 74.9% drop in April. The largest increases were in the motor vehicle (+$983.5 million) and motor vehicle parts (+$439.8 million) industries, as most plants re-opened and gradually resumed production by mid-May. Despite this monthly increase, sales of motor vehicles and parts were down 79.1% compared with May 2019.
Refineries ramp up production
After four consecutive months of decline, sales in the petroleum and coal product industry increased 18.6% to $2.4 billion in May. The gain reflected higher volumes and prices, as refineries ramped up production in response to increased fuel demand as provinces across Canada began re-opening their economies in May. Nevertheless, total sales were down 62.9% compared with May 2019.
Sales of fabricated metal products rose 14.8% to $2.7 billion in May following two consecutive monthly decreases. The gains were widespread, but were more pronounced in the architectural and structural metal industry in tandem with the re-opening of the construction industry in several provinces in May.
Sales also increased in the plastic and rubber (+18.1%), wood product (+14.8%), miscellaneous (+32.5%) and furniture and related products (+35.3%) industries.
Machinery and paper sales decline
Machinery sales were down for the fourth consecutive month, declining 6.9% to $2.6 billion in May. Many machinery manufacturers indicated that they experienced lower demand as some customers postponed some orders due to COVID-19. In May, declines were mostly concentrated in commercial and service industry machinery.
Sales in the paper industry fell for the second consecutive month, down 5.5% to $2.1 billion in May. The decline was mainly attributable to lower sales in the pulp, paper and paperboard mills industry, due to lower demand as many corporate offices, shopping malls and restaurants were closed through April and May.
Ontario and Quebec lead the gains
Sales increased in eight provinces in May, led by Ontario and Quebec.
Following a record 37.0% decline in April, manufacturing sales in Ontario rose 17.5% to $16.4 billion, mostly reflecting higher sales of motor vehicles (+$958.9 million) and motor vehicle parts (+$421.4 million).
In Quebec, sales rose 9.1% to $10.6 billion in May, following a 25.1% decline in April. Sales increased in 17 of 21 industries, led by the fabricated metal product (+37.9%), wood product (+43.3%), furniture and related product (+108.0%) and transportation equipment (+18.2%) industries.
Manufacturing sales in the census metropolitan area of Toronto increase
In May, manufacturing sales on an unadjusted basis rose in 11 of the 12 census metropolitan areas (CMAs) covered by the survey, led by the Toronto CMA (+20.3%) and the CMA of Montréal (+8.4%).
In the CMA of Toronto, the increase in the transportation equipment industry (+202.0%) was mostly attributable to motor vehicles and motor vehicle parts.
In the Montréal CMA, higher sales of primary metals, food, petroleum and coal product, as well as beverage and tobacco products drove the growth in May.
Manufacturing sales in the CMA of Halifax were down 8.5% due to lower sales in the transportation equipment industry.
Inventory levels decrease
Inventory levels declined for the second consecutive month, falling 1.5% to $86.3 billion in May. Inventories were down in 13 of 21 industries, led by the transportation equipment (-3.4%), fabricated metal product (-4.9%), machinery (-3.2%) and primary metal (-3.1%) industries. These decreases were partly offset by a 3.5% increase in wood product inventories.
The inventory-to-sales ratio declined from 2.41 in April to 2.15 in May. 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 decline
Total unfilled orders for the manufacturing sector declined for the second consecutive month, down 2.4% to $95.4 billion in May. The decrease mainly reflected lower unfilled orders in the aerospace product and parts industry (-3.2%). This was partially offset by higher unfilled orders in the miscellaneous and motor vehicle industries.
After dropping by 31.7% in April, new orders rose 9.4% to $37.8 billion in May, mostly on higher orders of transportation equipment.
Capacity utilization rate increases
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increased 8.8 percentage points, from 54.0% in April to 62.8% in May.
The capacity utilization rate for durable goods rose 11.3 percentage points to 54.3%, mostly attributable to higher production at motor vehicle assembly and motor vehicle parts plants after full shutdowns in April.
The capacity utilization rate for non-durable goods rose 4.2 percentage points to 72.2%, mainly reflecting ramped up production at several refineries across the country.
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
While the quality of this month's data remains high, response rates from manufacturers have fallen from the usual 95% to a rate of 85% in May. Every effort has been made to supplement this month's data with information from other sources.
Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.
Seasonally adjusted data are data that have been modified to eliminate the effect of seasonal and calendar influences to allow for more meaningful comparisons of economic conditions from period to period. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Trend-cycle estimates are included in selected charts as a complement to the seasonally adjusted series. These data represent a smoothed version of the seasonally adjusted time series and provide information on longer-term movements including changes in direction underlying the series. For information on trend-cycle data, see Trend-cycle estimates – Frequently asked questions.
Both seasonally adjusted data and trend-cycle estimates are subject to revision as additional observations become available. These revisions could be large and could even lead to a reversal of movement, especially for reference months near the end of the series or during periods of economic disruptions.
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 July 28.
Data from the Monthly Survey of Manufacturing for June will be released on August 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).