Monthly Survey of Manufacturing, January 2021
Manufacturing sales rose 3.1% to $56.2 billion in January, following a 1.3% gain in December. Sales were up in 16 of 21 industries, driven mainly by the wood product, computer and electronic product, and primary metal industries. Motor vehicle manufacturing posted the largest decline.
In constant dollars, manufacturing sales were up 1.1%, indicating a higher volume of goods sold in January.
Wood product sales remain strong
Sales of wood products rose 9.1% to $4.1 billion in January, driven by higher prices and sales volumes. Prices for lumber and other wood products increased for the ninth time in 12 months, rising 10.8% in January. This industry has been one of the main contributors to manufacturing sales increases since the easing of restrictions after the first wave of the pandemic. Exports of forestry products and building and packaging materials were up 10.7% in January. The value of building permits issued in January increased 8.2%.
Following a 3.9% decline in December, computer and electronic product sales rose 22.4% to $1.4 billion in January on higher sales of navigational, measuring, medical and control instruments. Sales volumes of computer and electronic products increased by one-quarter (+25.4%).
In the primary metal industry, sales increased for the fourth consecutive month, rising 6.0% to $4.2 billion in January—the highest level since June 2019. The iron and steel mills and ferro-alloy manufacturing industry was responsible for the increase. On a year-over-year basis, sales were up 7.9%. In real terms, sales of primary metal products rose 3.9%, indicating that both prices and sales volumes increased in January.
Sales also grew for the non-metallic mineral product (+16.8%), plastics and rubber products (+6.9%), and food (+2.0%) industries.
Following a 1.2% increase in December, motor vehicle sales fell 8.2% to $3.9 billion in January, the lowest level since May 2020. The worldwide shortage of semiconductor chips affected the motor vehicle industry across North America and halted production in many auto assembly plants in Ontario. The lack of chips is expected to further reduce vehicle production in the first quarter of 2021.
The chip shortage also affected many auto part makers, and sales of motor vehicle parts decreased 3.5% to $2.5 billion in January. Some auto part manufacturers had to reduce production or shut down operations in January.
Ontario leads provincial sales
Manufacturing sales increased in eight provinces in January, led by Ontario and Quebec. Newfoundland and Labrador posted the largest decline.
Following three consecutive declines, sales in Ontario rose 3.0% to $25.6 billion in January on higher sales in 14 of 21 industries. The increase was attributable to higher sales of computer and electronic products (+43.3%), non-metallic mineral products (+30.1%), and plastics and rubber products (+10.3%). The global semiconductor chip shortage resulted in lower sales of motor vehicles (-9.1%) and motor vehicle parts (-3.6%) in Ontario. On a year-over-year basis, sales in Ontario increased 0.4% in January.
Sales in Quebec increased for the third consecutive month, up 2.8% to $13.8 billion in January on higher sales of primary metal (+9.4%), food (+3.4%), and aerospace products and parts (+8.8%). Despite the gain in January, sales in Quebec were 1.8% lower year over year.
In British Columbia, sales rose for the second consecutive month, up 5.3% to $5.0 billion on higher sales of wood products (+7.4%). Excluding the sales decline in November 2020, wood products have driven manufacturing sales in British Columbia since June 2020.
Sales in Newfoundland and Labrador fell 7.4% to $332.6 million in January on lower sales of durable goods. Sales were down 38.7% year over year.
Global semiconductor chip shortage hits auto industry in Toronto
Manufacturing sales on an unadjusted basis were down in 8 of the 12 selected census metropolitan areas (CMAs) in January, led by Toronto. Sales in Regina increased the most.
On the heels of a 9.4% decline in December, sales in Toronto decreased a further 14.3% to $8.3 billion in January on lower sales of motor vehicles. The global semiconductor chip shortage interrupted vehicle production in many car assembly plants in the Toronto CMA, resulting in sales falling by more than half (-55.4%) in the motor vehicle industry. This brought total manufacturing sales in Toronto down 11.7% year over year.
In Montréal, sales decreased 5.6% to $5.7 billion in January on lower sales in 18 of 21 industries. Lower sales of computer and electronic products (-28.1%), aerospace products and parts (-8.5%), and machinery (-22.1%) contributed the most to the decline.
Following two consecutive declines, sales in Regina rose 117.3% to $737.1 million in January on higher sales of chemicals and petroleum and coal products. Sales were up 7.6% year over year in January.
Inventory levels rise
Following a 0.6% decline in December, total inventories rose 1.9% to $88.3 billion in January on higher inventories of chemicals (+6.2%), plastics and rubber products (+7.7%), and transportation equipment (+1.3%). The gains were partially offset by lower inventories of electrical equipment, appliances and components (-8.8%), and beverage and tobacco products (-4.4%). Total inventory levels in January were down 0.4% year over year.
The inventory-to-sales ratio decreased from 1.59 in December to 1.57 in January. 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
Following a 0.4% gain in December, unfilled orders rose 2.3% to $87.5 billion in January on higher unfilled orders in the transportation equipment (+2.0%) and primary metals (+14.2%) industries. The machinery industry posted the largest decline (-2.3%).
The total value of new orders increased 6.1% to $58.2 billion in January, up 3.4% year over year and the highest level since August 2019. The transportation equipment industry contributed the most to the gains in January. New orders of motor vehicles declined 8.7%.
Higher production boosts capacity utilization rate
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increased from 75.7% in December to 76.8% in January because of higher production.
Capacity utilization rates rose in the petroleum and coal product (+4.8 percentage points), chemical (+4.6 percentage points), machinery (+2.7 percentage points), and primary metal (+1.9 percentage points) industries. The production capacity utilization rate in the transportation equipment industry fell 5.2 percentage points in January on lower production at car assembly plants in Ontario because of the semiconductor chip shortage.
Sustainable development goals
On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 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 sustainable development goals. This release will be used to help 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 86.5% in January. 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 disruption.
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 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.
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 to revise multiple years of 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 March 23.
Data from the Monthly Survey of Manufacturing for February will be released on April 15.
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).