Monthly Survey of Manufacturing, September 2013
Manufacturing sales rose 0.6% to $49.9 billion in September, the fourth increase in five months. The gain in September was largely a result of higher sales in the motor vehicle assembly and food industries. Total sales in September were at their highest level since June 2012.
Sales rose in 11 of 21 industries, representing about 55% of Canadian manufacturing.
Both the durable and the non-durable goods industries posted 0.6% sales gains.
Constant dollar sales increased 1.0% in September, indicating a rise in volumes.
Motor vehicle and food sales lead the gains
In the motor vehicle assembly industry, sales were up 5.4% to $4.7 billion in September. Some manufacturers indicated that sales rose during the month because of favorable market conditions. As well, the introduction of some 2014 models contributed to the sales gain.
Sales in the motor vehicle parts industry rose 2.5% to $2.0 billion. Since reaching a peak of $2.2 billion in June 2012, sales have been generally decreasing. The gain in September was only the third since the peak.
Food sales rose 2.6% to $7.5 billion in September, the largest increase since December 2012. The gain stemmed from higher sales in the grain and oilseed milling sub-industry. Several respondents in the sub-industry indicated that some plants were shut down for maintenance work for a part of August.
In September, lower sales in the primary metal, aerospace product and parts, petroleum and coal product, fabricated metal product as well as the computer and electronic product industries offset a portion of the gains.
Ontario and New Brunswick lead the way
In Ontario, sales increased 1.4% to $22.9 billion. The rise was largely a result of higher sales in the motor vehicle assembly, the motor vehicle parts as well as the chemical industries. A 5.2% decline in the petroleum and coal product industry partly offset these gains.
Sales in New Brunswick were up 16.8% to $1.7 billion, the largest monthly gain in the province since March 2012. The increase reflected higher sales of non-durable goods.
Saskatchewan's manufacturing sector posted a sales gain of 9.0% in September. The total sales level of $1.3 billion for the province was the highest ever recorded. The gain was mostly attributable to higher sales of non-durable goods.
In Alberta, sales fell 3.6% to $6.3 billion. Decreases in the petroleum and coal product as well as chemical industries were largely responsible for the provincial decline.
In Quebec, sales were down 1.0% to $11.5 billion, giving back some of the 3.8% increase recorded in August. Lower sales were posted by 13 of 21 industries in the province.
Inventories decline in September
Total inventories fell 0.9% to $68.2 billion in September. Inventories have been generally trending upwards over the past several years. The decline in September was the third in nine months.
In the petroleum and coal product industry, inventories were down 10.8% to $5.6 billion. About 53% of the decline reflected a decrease in raw materials held by manufacturers.
Transportation equipment inventories declined 2.2% to $11.6 billion. Lower inventories in the aerospace product and parts as well as the motor vehicle assembly industries were largely responsible for the decline.
The inventory-to-sales ratio declined to 1.37 in September from 1.39 in August. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders decrease
Unfilled orders declined 2.2% to $71.9 billion in September. Most of the decrease was a result of lower unfilled orders in the aerospace product and parts industry. The machinery industry and the electrical equipment, appliance and component industry also contributed to the decline in total unfilled orders.
In the aerospace product and parts industry, unfilled orders decreased 2.9% to $40.7 billion. The decline largely reflected a 2.5% drop in the value of the US dollar relative to the Canadian dollar in September. Most unfilled orders in the industry are held in US dollars.
Unfilled orders were down 2.9% in the machinery industry and 6.1% in the electrical equipment, appliance and component industry. For both industries, reported decreases were widespread.
New orders declined 2.6% to $48.3 billion, as a result of a decrease in the aerospace product and parts industry.
Note to readers
Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.
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 metal, 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 industry and shipbuilding industries, the value of production is used instead of sales of goods manufactured. This value is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured.
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 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 (noon spot rate) established by the Bank of Canada is used for the conversion. The monthly average exchange rate is available on CANSIM Table 176-0064.
Inventories and unfilled orders are reported at the end of the reference period. Therefore, for these variables, the noon spot exchange rate on the last working day of the month is used for the conversion. The noon spot exchange rate is available on CANSIM Table 176-0067. Note that because of exchange rate fluctuations, the monthly average exchange rate can differ substantially from the exchange rate on the last working day of the month.
Data from the October Monthly Survey of Manufacturing will be released on December 17.
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To enquire about the concepts, methods or data quality of this release, contact Michael Schimpf (613-951-9832; email@example.com), Manufacturing and Energy Division.
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