Monthly Survey of Manufacturing, October 2013
Manufacturing sales increased 1.0% in October to $50.1 billion. With this gain, sales reached their highest level since May 2012. The sales increase in October was mostly caused by higher sales in the food industry. Sales also rose notably in the chemical industry.
Sales advanced in 13 of 21 industries, representing 49% of the manufacturing sector. Non-durable goods sales advanced 2.6% while durable goods sales declined 0.5%.
Constant dollar sales were up 1.0%, indicating a rise in volumes.
Sales rise substantially in the food industry
In the food industry, sales rose 6.9% to $7.7 billion in October, as a result of widespread increases reported by a large number of food manufacturers. The sales gain in the industry was the largest recorded over the past two decades. The advance in manufacturing sales also coincided with higher exports of farm, fishing and intermediate food products. Noteworthy sales gains were posted by the meat, dairy, other food, and grain and oilseed milling sub-industries. In the grain and oilseed milling sub-industry, strong sales reflected record levels of canola production this year.
Chemical sales increased 2.8% to $4.1 billion in October, as a result of widespread gains.
In the transportation equipment industry, sales fell 1.7% to $8.8 billion, offsetting a portion of the overall gain in total manufacturing sales. Sales were down 1.9% in the motor vehicle assembly industry while production decreased 4.5% in the aerospace product and parts industry.
Sales up in seven provinces
Manufacturing sales were up in seven provinces in October, with Quebec leading the way.
In Quebec, sales rose 2.1% to $11.7 billion in October. The gain largely stemmed from higher food sales, particularly in the dairy, meat, and animal food sub-industries. Higher production in the aerospace product and parts industry also contributed to the provincial increase.
Sales in the manufacturing sector in Alberta posted a 2.7% increase to $6.4 billion in October, largely reflecting higher sales in the chemical, petroleum and coal product as well as food industries.
New Brunswick manufacturing sales were up 7.7% to $1.9 billion, the highest level on record. Sales rose in 16 of 21 industries in the province.
Lower sales in Ontario offset a portion of the gains in October. The province's manufacturing sales edged down 0.4% to $22.5 billion. The decrease was largely the result of a 31.9% decline in the aerospace product and parts industry along with decreases in the petroleum and coal product, and motor vehicle industries. Production in the aerospace industry is substantially more volatile compared with the manufacturing sector as a whole.
Manufacturing inventories rose 1.9% to $69.4 billion, the third gain in four months. The increase largely stemmed from higher inventories of petroleum and coal products and transportation equipment.
In the petroleum and coal product industry, inventories were up 9.5% to $6.0 billion. The gain was entirely caused by higher inventories of raw materials on hand.
Transportation equipment inventories rose 3.4% to $12.0 billion in October. The gain was mostly attributable to a 3.4% advance in aerospace products and parts and a 5.8% rise in the motor vehicle assembly industry.
Computer and electronic product inventories increased 4.3% to $3.2 billion, partly as a result of higher raw materials on hand.
The inventory-to-sales ratio rose to 1.39 in October from 1.37 in September. 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 increase
Unfilled orders rose 0.7% to $72.3 billion, the 10th gain in 12 months. The increase was caused by higher unfilled orders in the aerospace product and parts industry. Excluding the aerospace industry, unfilled orders were flat.
In the aerospace product and parts industry, unfilled orders advanced 1.2% to $41.3 billion. Most of the gain reflected a strengthening of the US dollar compared with the Canadian dollar. The bulk of unfilled orders in the aerospace industry are held in US dollars.
As well, unfilled orders rose 3.8% to $3.2 billion in the computer and electronic product industry. The gain was the second increase since March.
New orders increased 5.9% to $50.6 billion, reflecting gains in the aerospace product and parts, and food industries.
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 in 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 in 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 November Monthly Survey of Manufacturing will be released on January 21, 2014.
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; firstname.lastname@example.org).
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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