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Monthly Survey of Manufacturing, September 2020

Released: 2020-11-16

Manufacturing sales rose 1.5% to $53.8 billion in September, following a 1.4% decrease in August. Sales increased in 13 of 21 manufacturing industries led by the wood, chemical and food industries. Nevertheless, sales in September were 3.6% below their pre-pandemic levels in February.

Manufacturing sales in constant dollars rose 2.1%, indicating a larger volume of products was sold in September.

Chart 1  Chart 1: Manufacturing sales
Manufacturing sales

Manufacturing sales rose by just over one-quarter (+26.6%) in the third quarter, following four consecutive quarterly declines.

Wood manufacturing leads the growth

In the wood industry, sales rose 9.6% in September to a record high $3.3 billion, on higher sales at sawmills and wood preservation manufacturers. Sales in September were almost one-third (+32.1%) higher compared with February and up 39.6% year over year. Higher prices of lumber and other wood products (+6.3%) and higher volumes of sales (+4.0%) contributed to the gain in September (see Industrial product and raw materials price indexes).

Exports of forestry products and building and packaging materials increased 10.4% in September, primarily on higher exports of lumber, while the total value of residential permits issued nationally rose 6.9%, suggesting the potential for continued high demand.

Wood sales were up by over one-third (+35.2%) in the third quarter.

Sales in the chemical industry increased 6.7% to $4.5 billion in September, driven by higher pharmaceutical and medicine sales. Sales rose in every chemical subsector except basic chemicals in September and were up 1.5% year over year, with most of the growth occurring in the third quarter (+6.4%).

Sales in the food industry increased for the second consecutive month, up 1.3% to $9.2 billion in September. Sales were up in every food subsector except meat, led by higher fruit and vegetable and seafood sales. High prices for food products contributed to the sales gain in September.

Following four monthly consecutive increases, sales in the miscellaneous industry declined 4.8% in September. Nevertheless, year-over-year sales were up 16.3%.

Alberta drives manufacturing sales growth

Manufacturing sales rose in nine provinces in September. Alberta posted the largest gain, followed by Ontario and New Brunswick.

Sales in Alberta continued to rebound from the pandemic related shutdown this spring, up 3.9% to $5.4 billion in September. Higher sales of chemical and wood products were mainly responsible for the increase. Despite the increase in September, sales in Alberta were 12.6% below the pre-pandemic level in February and down 11.6% year over year.

Sales in Ontario increased 0.6% to $25.2 billion in September, following a 5.0% decrease in August. Sales rose in 14 of 21 industries, led by chemicals (+4.2%). Sales in the miscellaneous industry were down 9.2% on lower sales of gold and silver.

Sales in New Brunswick increased 13.2% to $1.3 billion, mostly attributable to higher sales of non-durables goods.

Manufacturing sales in Saskatchewan were down 2.2% in September, reflecting lower sales of non-durables goods.

Toronto and Montréal lead the sales growth among selected census metropolitan areas

Manufacturing sales on an unadjusted basis were up in 10 of the 12 selected census metropolitan areas (CMAs) in September, led by Toronto (+8.2%) and Montréal (+8.7%). The gains in both CMAs were mainly attributable to higher sales of transportation equipment and food products.

Following two consecutive monthly increases, sales in Regina fell by one-fifth (-19.9%) in September on lower sales of petroleum products and machinery.

Inventory levels rise

Total manufacturing inventories increased 0.7% to $87.0 billion in September, the second consecutive monthly gain. Inventories were up in 14 of 21 industries, led by the transportation equipment and wood product industries. Nevertheless, total inventory levels in September were 0.7% below their pre-pandemic level in February. Total inventories rose 0.4% in the third quarter, following a 1.9% decline in the second quarter.

Chart 2  Chart 2: Inventory levels increase
Inventory levels increase

The inventory-to-sales ratio edged down from 1.63 in August to 1.62 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.

Chart 3  Chart 3: The inventory-to-sales ratio edges down
The inventory-to-sales ratio edges down

Unfilled orders increase following five consecutive monthly declines

Following five consecutive monthly declines, unfilled orders rose 0.3% in September on higher unfilled orders for the transportation equipment (+0.4%) and primary metals (+7.5%) industries. Unfilled orders increased in 12 of 21 industries in September. With this increase, total unfilled orders in September stood 7.1% below February.

Chart 4  Chart 4: Unfilled orders increase
Unfilled orders increase

Following a 0.8% decline in August, new orders rose 3.6% to $54.1 billion in September on higher new orders of transportation equipment, wood products and food industries. These gains were partially offset by a 39.7% decline in new orders in the computer and electronic product industry.

Capacity utilization rate increases

The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increased from 75.5% in August to 78.5% in September, driven by higher production in 18 of 21 industries.

Chart 5  Chart 5: The capacity utilization rate increases
The capacity utilization rate increases

Capacity utilization rates were up in the transportation equipment (+6.6 percentage points), chemical (+4.1 percentage points), wood (+2.2 percentage points) and food (+1.7 percentage points) industries. Employment in the manufacturing sector also rose 68,000 in September.






Sustainable Development Goals

On January 1, 2016, the world officially began implementation of the2030 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 87.7% in September. 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.

With this release, unadjusted estimates of sales of goods manufactured, inventories and orders in tables 16-10-0047-01 and 16-10-0048-01 have been revised back to January 2013 and back to January 2011 for the seasonally adjusted data. Real manufacturing sales, orders, inventory owned and inventory-to-sales ratio estimates in table 16-10-0013-01 have been revised back to January 2011.

The unadjusted estimates of sales of goods manufactured for the 12 census metropolitan areas, in table 16-10-0011-01, have been revised back to January 2013.

The unadjusted estimates of capacity utilization rates, in table 16-10-0012-01, have been revised back to January 2017.

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 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 daily average 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.

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.

Once a 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 November 23.

Next release

Data from the Monthly Survey of Manufacturing for October will be released on December 15.

Contact information

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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