Monthly Survey of Manufacturing

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Manufacturing sales increased 4.5% to $47.7 billion in January, the highest level since October 2008. While the gains were widespread, the increase was mostly concentrated in the transportation equipment sector. The increase in total sales was the largest since July 2009 (+5.3%).

Constant dollar manufacturing sales rose 5.5% in January. Constant dollar sales were relatively stable over the latter half of 2010, before the gain in January.

Higher sales were reported in 17 of 21 industries, representing 87% of total manufacturing.

Sales gains concentrated in the transportation equipment industry

Although the majority of industries posted higher sales in January, the gains were mostly concentrated in the motor vehicle and parts industries as well as aerospace product and parts.

Manufacturing sales of motor vehicles rose 26.0% to $4.1 billion in January. The gain reflects large increases at a number of assembly plants following slowdowns and production difficulties in December caused by severe weather conditions in Southern Ontario. The increase is consistent with the 22.9% rise in exports of passenger autos and chassis recorded for January. Related to the rise in motor vehicle assembly, sales in the motor vehicle parts industry rose 23.2%.

Production in the aerospace product and parts industry was up 25.2% to $1.3 billion. The increase in January was the largest since December 2009.

Sales advanced 6.7% in the machinery industry to $2.6 billion. The rise reflects higher sales of agricultural, mining and construction machinery, as well as increased sales by engine, turbine and power transmission equipment manufacturers.

In the food industry, sales were up 2.2% to $7.1 billion. Part of the increase reflects a 0.3% rise in food prices, as recorded by the Industrial Product Price Index.

Sales gains focused in four provinces

Higher sales were reported by four provinces in January, representing 81% of total manufacturing.

Sales increased 5.8% to $21.9 billion in Ontario. The increase was largely a result of higher sales in the motor vehicle (+27.1%) and motor vehicle parts (+24.4%) industries. Food (+3.3%) also contributed to the provincial gain.

In Quebec, sales advanced 7.4% to $11.8 billion. A substantial 48.7% increase by manufacturers in the transportation equipment industry was responsible for just over half of the provincial gain. Other industries with sales increases included food (+8.1%), petroleum and coal products (+4.3%) and wood products (+8.0%).

Rounding out the gains in January, sales in British Columbia rose 3.2%, while sales in New Brunswick increased 3.8%.

On the downside, sales fell 4.2% in Manitoba to $1.2 billion, as a result of declines in the transportation equipment and chemical product industries. Sales fell 3.0% in Saskatchewan, mostly reflecting declines in the province's non-durable goods industries.

Inventory levels continue to advance

Inventories held by manufacturers rose 1.2% in January to $61.5 billion. Increases were reported by manufacturers in 16 of 21 industries, led by the food (+2.9%), fabricated metal product (+3.0%) and primary metal (+1.7%) industries. Inventories have risen in six of the past eight months, since their most recent low of $58.6 billion in May 2010.

Manufacturers in the motor vehicle industry reported a 25.2% drop in inventories to $1.0 billion. In December, inventories in the industry had increased a substantial 37.9%, as severe weather conditions in Southern Ontario affected production at some plants. The decline in January reflects a return to a level more comparable to values reported during the rest of 2010.

The inventory-to-sales ratio fell from 1.33 in December to 1.29 in January. This was the lowest level for the ratio since July 2008 (1.26).

Unfilled orders rise for the first time in five months

Unfilled orders rose 1.6% in January to $52.3 billion, mostly reflecting an increase in the aerospace product and parts industry. The overall gain was the first increase since August 2010.

In the aerospace product and parts industry, unfilled orders increased 3.4% to $21.7 billion in January. Excluding aerospace, unfilled orders edged up 0.3%.

Unfilled orders in the fabricated metal product industry were up 2.0% in January, contributing to the backlog of orders.

Declines in unfilled orders in the railroad rolling stock (-1.8%), computer and electronic product (-1.1%) and food (-8.8%) industries partly offset the overall gains.

New orders increased 8.6% to $48.5 billion in January. The leading contributors to the increase included the aerospace product and parts, motor vehicle, motor vehicle parts and fabricated metal product industries.

Available on CANSIM: tables 304-0014, 304-0015 and 377-0008.

Table 304-0014: Canada data (sales, inventories, orders) by industry.

Table 304-0015: Provincial sales by industry.

Table 377-0008: Constant dollar sales, inventories and orders.

Definitions, data sources and methods: survey number 2101.

Data from the February Monthly Survey of Manufacturing will be released on April 14.

For more information, or to order data, contact the dissemination officer (toll-free 1-866-873-8789; 613-951-9497; fax: 613-951-3877; manufact@statcan.gc.ca). To enquire about the concepts, methods or data quality of this release, contact Michael Schimpf (613-951-9832, michael.schimpf@statcan.gc.ca), Manufacturing and Energy Division.