Monthly Survey of Manufacturing, September 2021
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Released: 2021-11-15
Manufacturing sales declined 3.0% to $58.5 billion in September, the lowest level since May 2021. Sales decreased in 12 of 21 industries, with most of the decline attributable to lower sales of motor vehicles due to the shortage of semiconductors. The decrease was partially offset by higher sales in the petroleum and coal industry.
Chart 1
Manufacturing sales
Sales in constant dollars decreased 4.2% in September, indicating a lower volume of goods sold. Month over month, the Industrial Product Price Index rose 1.0% in September, while the Raw Materials Price Index increased 2.5% .
Semiconductor chip shortage continues to impact motor vehicle production
The global supply chain disruption continues to slow down recovery in many industries. The lack of computer chips, shortage of shipping containers, port congestion, and environmental disasters presented serious challenges to many manufacturers and distributors of goods, and the supply chain disruption is expected to continue into 2022.
In Canada, the semiconductor chip shortage affected auto manufacturing the most and resulted in a production curtailment in all major auto assembly plants. In September, sales of motor vehicles fell 35.6% to $1.9 billion, the lowest sales since May 2020. The production capacity rate in the transportation equipment industry fell from 70.6% in August 2021 to 55.3% in September 2021. Sales of motor vehicle parts declined 13.5% to $1.8 billion accordingly. On a quarterly basis, sales in the motor vehicle industry increased 9.3% in the third quarter, following three consecutive quarterly declines but remained 42.2% down compared with the third quarter of 2020. Exports of motor vehicles and parts decreased 17.9% in September.
Sales in the primary metal industry posted their first decline since April 2020, falling 6.3% to $5.2 billion in September. Sales in volume terms decreased 8.7% month over month. A maintenance shutdown at a major non-ferrous metal plant in Quebec was responsible for the decline. Primary metal sales were up 4.6% in the third quarter, the fifth consecutive quarterly gain.
Sales also decreased in the plastic and rubber (-3.6%), chemical (-1.8%), and computer and electronic (-5.4%) product industries in September.
Petroleum products sales rose 3.0% to $6.7 billion in September, on higher prices. Sales in constant dollars were down 1.6%. Prices for refined petroleum energy products increased 3.8% in September. In the meantime, sales in the petroleum and coal industry increased 15.1% in the third quarter, the fifth consecutive quarterly gain.
Sales of wood products rose 1.5% to $3.5 billion in September, mainly on higher volumes sold. Prices for lumber and other wood products decreased 1.3%, while sales on a constant dollar basis were up 2.4%. Despite the month-over-month increase, sales of wood products were down 29.6% in the third quarter. The total value of building permits increased 4.3% in September.
Other industries that posted increases in September were the fabricated metal (+0.9%), ship building (+9.7%), and beverage and tobacco (+1.6%) industries.
Computer chip shortage hits sales in Ontario
Manufacturing sales decreased in eight provinces in September, led by Ontario and Quebec. Meanwhile, Newfoundland and Labrador posted the largest increase.
Sales in Ontario decreased 4.1% to $24.8 billion in September, primarily on lower sales of motor vehicle and motor vehicle parts due to the lack of semiconductor parts. Following a 9.7% decline in August, sales of motor vehicles fell 36.9% to $1.8 billion in September, bringing sales to their lowest level since May 2020. Sales of motor vehicle parts were also down month over month (-14.1%). Despite the monthly decline, motor vehicle sales rose 10.7% in the third quarter, following three consecutive quarterly declines.
Sales in Quebec decreased 2.2% to $15.3 billion in September on lower sales in 10 of 21 industries. This decrease was led by the primary metal (-11.5%), plastic and rubber (-8.2%), and aerospace product and parts (-5.0%) industries. Petroleum product sales posted the largest increase, rising 4.0% to $1.5 billion in September. Despite the decline in September, total sales were 2.2% higher in the third quarter than in the second quarter of 2021.
In Newfoundland and Labrador, sales rose 6.1% to $303.4 million in September, driven by higher sales in durable goods industries. Sales on quarterly basis were still down 22.9% in the third quarter.
Motor vehicle sales in Toronto stall
Manufacturing sales on a seasonally adjusted basis fell in 7 of the 12 census metropolitan areas covered by the survey in September, led by Toronto, Edmonton, and Montréal. Sales in Regina increased the most.
Following two consecutive increases, sales in Toronto declined 2.7% to $10.1 billion in September, mostly on lower sales of motor vehicles and motor vehicle parts (-5.9%). Motor vehicle sales fell 12.3%, as auto assembly plants in Toronto lowered production due to the semiconductor shortage.
In Edmonton, sales fell 8.5% to $2.9 billion, driven by lower sales of petroleum and coal (-16.3%). Nevertheless, total sales in Edmonton were up 31.9% compared with September 2020.
Sales in Montréal decreased 3.4% to $6.9 billion in September, attributable to lower sales of primary metals (-13.0%) and lower production of aerospace products and parts (-5.0%).
Meanwhile, sales in Regina increased 9.8% to $807.5 million in September, led by higher sales of chemical and petroleum and coal.
Quarterly sales edge up despite decline in the wood industry
Manufacturing sales edged up 0.7% in the third quarter, the fifth consecutive quarterly increase. Higher sales of petroleum and coal (+15.1%), food (+3.2%), and primary metals (+4.6%) were largely offset by a decline in sales of wood (-29.6%). The quarterly decline in wood sales was primarily attributable to the downturn in prices of lumber and other wood products.
Volume sales declined 0.9% in the third quarter, led by the primary metal (-6.8%) and chemical (-3.5%) industries. The petroleum and coal industry posted the largest increase (+4.5%).
Record-high inventory levels continue
Total inventories increased 1.3% to a record high $97.6 billion in September, driven by higher inventories of primary metal (+3.6%), fabricated metal (+3.7%) and wood (+3.6%). Up until 2021, higher prices for raw materials contributed to the gains in total inventories. Year over year, total inventories rose 12.7%. Raw materials are the largest component of manufacturing inventories followed by finished products. The share of raw materials in total inventories has been rising since the COVID-19 pandemic, mainly due to higher prices.
Chart 2
Inventory levels rise
The inventory-to-sales ratio increased from 1.60 in August to 1.67 in September. The ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Chart 3
The inventory-to-sales ratio increases
Unfilled orders edge upward
Total value of unfilled orders edged up 0.6% to $94.7 billion in September, mostly due to higher unfilled orders of machinery (+5.8%) and fabricated metal (+2.6%) products. Year over year, unfilled orders were down 1.3%.
Chart 4
Unfilled orders increase
The total value of new orders decreased 3.0% to $59.1 billion in September, mainly attributable to lower new orders of transportation equipment.
Capacity utilization rate decreases on lower production
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector decreased from 77.1% in August to 74.6% in September, on lower production.
Chart 5
The capacity utilization rate decreases
The capacity utilization rate fell in 10 of 21 industries September, driven by lower production in the transportation equipment (-15.3 percentage points), petroleum and coal (-3.5 percentage points), primary metal (-2.8 percentage points) and chemical (-4.0 percentage points) industries. The capacity utilization rate in food manufacturing increased 1.5 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.
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 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.
Revision policy
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 November 22, 2021.
Next release
Data from the Monthly Survey of Manufacturing for October will be released on December 15, 2021.
Contact information
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