Monthly Survey of Manufacturing, July 2021
Following a 3.6% increase in June, manufacturing sales fell 1.5% in July to $59.6 billion. Sales were down in 12 of 21 industries, led by the wood product (-21.8%), aerospace product and parts (-19.0%), miscellaneous (-12.1%) and petroleum and coal product (-2.3%) industries. The declines were partially offset by higher sales in the motor vehicles (+13.5%), primary metal (+3.9%) and motor vehicle parts (+7.6%) industries. On a year-over-year basis, total sales were up 12.2% in July.
Sales in constant dollars declined 1.7% to $48.9 billion in July, indicating a lower volume of goods sold. The Industrial Product Price Index decreased 0.4% in July, while the Raw Materials Price Index rose 2.2%.
Wood product sales decline
Following a 5.8% decline in June, sales of wood products fell 21.8% to $4.0 billion in July, driven by a lower volume of sales and prices. Sales in constant dollars declined 3.9% in July, while the price of lumber and other wood products dropped 23.0%. Exports of forestry products and building and packaging materials fell 12.7% in July. The total value of building permits in Canada decreased 3.9%. Despite the recent declines, wood product sales were up 46.0% year over year.
Aerospace production declined 19.0% to $1.3 billion in July, following a 32.3% increase in June. The decline in July brought total production of aerospace products and parts down 19.2% year over year and 40.5% below pre-pandemic levels in February 2020. The aerospace industry has been hard hit by pandemic-related travel restrictions, as aircraft manufacturers face production disruptions and lower demand. Demand for aerospace parts has also declined, as less maintenance has been required.
Sales in the miscellaneous manufacturing industry declined 12.1% to $1.2 billion in July, on lower sales of other miscellaneous products, including gold and silver.
Sales of petroleum and coal products fell 2.3% to $5.8 billion in July on lower sales at refineries in Eastern Canada. Sales on a constant dollar basis decreased 5.1% in July, while prices for refined petroleum energy products rose 2.9%. Nevertheless, sales were up 63.7% year over year.
Sales also declined in the other transportation equipment (-23.5%), non-metallic mineral product (-3.2%) and chemical product (-0.8%) industries in July.
Motor vehicle sales increased 13.5% to $3.4 billion in July, the third consecutive monthly gain, while sales of motor vehicle parts were up 7.6%. The motor vehicle industry was less impacted by the summer shutdowns this July as auto assembly plants tried to avoid further production cuts due to the semiconductor part shortage. Consequently, sales on a seasonally adjusted basis increased in July.
Primary metal sales rose 3.9% to $5.6 billion in July, the 15th consecutive month-over-month increase and the highest level on record. Higher prices were responsible for the gain as sales in constant dollars edged up 0.1%. Prices for basic and semi-finished iron or steel products increased 5.9% in July and were up 50.9% year over year.
Sales of plastic and rubber (+3.3%), machinery (+1.9%) and food (+0.4%) products also rose in July.
Wood product industry contributes to lower sales in Quebec and British Columbia
Manufacturing sales decreased in six provinces in July, led by Quebec and British Columbia. Ontario reported the largest sales increase.
Sales in Quebec fell 3.5% to $15.0 billion in July and there were lower sales in 15 of 21 industries. The wood product industry in Quebec posted the second consecutive month-over-month decline, down 25.5% to $941.2 million—the lowest level since October 2020. Quebec aerospace production decreased 22.3% in July and was down 19.9% year over year.
In British Columbia, sales were down 8.6% to $5.1 billion on lower sales of wood (-24.1%), primary metal (-22.7%) and paper (-7.5%) products. Nevertheless, sales in the province were up 20.4% year over year.
Following a 5.1% increase in June, sales in Ontario rose 1.1% to $25.8 billion in July, mainly on higher sales of motor vehicles (+14.7%), motor vehicle parts (+8.1%) and plastic and rubber products (+6.8%). Motor vehicle sales in July were the highest since March, when the semiconductor part shortage began to affect auto manufacturers around the world. Despite the gain in July, motor vehicle sales in Ontario were down 35.8% year over year.
Sales in Montréal decrease on lower production of aerospace products and parts
Manufacturing sales on a seasonally adjusted basis fell in 7 of 12 census metropolitan areas (CMA) covered by the survey in July, led by Montréal and Hamilton. Sales in Toronto increased the most.
Following a 12.2% increase in June, sales in Montréal declined 5.1% to $6.7 billion in July, attributable to lower production of aerospace products and parts (-20.9%) and lower sales of machinery (-21.7%).
In Hamilton, sales decreased 5.7% to $1.7 billion, driven by lower sales of computer and electronic products and chemicals.
Sales in Toronto increased 6.0% to $10.1 billion in July, on higher sales in 12 of 21 industries, led by motor vehicles (+50.4%) and motor vehicle parts (+13.2%). In July, motor vehicle sales in Toronto were at their highest level since December 2020. On a year-over-year basis, total sales in Toronto were down 5.1%.
Inventory levels rise
Total inventories rose 2.6% to $93.9 billion in July, the seventh consecutive monthly gain, on higher inventories in the primary metal (+9.4%), machinery (+5.4%) and fabricated metal product (+3.6%) industries. Total inventories declined the most in the chemical product industry (-5.6%).
The inventory-to-sales ratio increased from 1.51 in June to 1.58 in July. The 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
The total value of unfilled orders increased 0.6% to $89.4 billion in July, mostly due to higher unfilled orders of machinery (+5.1%) and aerospace (+0.8%) products. Year over year, unfilled orders were down 7.4%.
The total value of new orders decreased 2.6% to $60.1 billion in July, mainly attributable to lower new orders of wood products (-23.5%).
Capacity utilization rate decreases on lower production
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector decreased from 79.3% in June to 76.7% in July on lower production.
The capacity utilization rate fell in 14 of 21 industries in July, and the largest declines in production capacity were in the transportation equipment (-7.7 percentage points), wood product (-7.2 percentage points), computer and electronic product (-7.5 percentage points) and plastic and rubber (-6.2 percentage points) industries. The capacity utilization rate in primary metal manufacturing increased 2.5 percentage points.
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
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 working 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 previous three 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 September 22.
Data from the Monthly Survey of Manufacturing for August will be released on October 14, 2021.
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).