Monthly Survey of Manufacturing, May 2015
Manufacturing sales edged up 0.1% to $49.9 billion in May, while constant dollar sales fell 0.5%, indicating a lower volume of goods sold.
The slight increase in current dollar sales was the second gain in 2015. Sales were up in 6 out of 21 industries, representing almost half of the Canadian manufacturing sector.
Advances in aerospace and petroleum offset by multiple declines
Advances in aerospace product and parts as well as petroleum and coal products in May, were offset by multiple declines, most notably the chemical and machinery industries.
Production in the aerospace product and parts industry rose 22.2% in May, after declining 18.0% in April. The aerospace industry is volatile relative to the manufacturing sector as a whole. The gain in May partly reflects changes in the value of the US dollar relative to the Canadian dollar, as sales and inventories are mainly reported in US dollars for the aerospace industry. Year to date, production has increased 7.4% compared with the same period in 2014.
Sales of petroleum and coal products rose 5.6%, mostly reflecting higher prices as reported by the Industrial Product Price Index. Prices fell from June 2014 to January 2015 for petroleum refineries, reaching a low in January. In May, prices were 14.0% higher than in January.
Lower sales in multiple industries offset the gains in aerospace and petroleum. Sales of chemical products fell 3.5%, reflecting in part a smaller seasonal increase than usual in the pesticides, fertilizers and other agricultural chemicals industry. Machinery manufacturers posted a 3.5% decline in sales and reported widespread decreases. Other industries posting lower sales included food and wood manufacturers.
Gains in Quebec offset by declines in Ontario
Gains in Quebec were offset by declines in Ontario in May. The other provinces reported relatively minor fluctuations, with the largest dollar gain in Alberta.
Sales rose 2.2% in Quebec, the second gain for the province in 2015. Higher production in the aerospace industry (+49.1%) was responsible for the growth in May. Year to date, aerospace production was up 8.9% compared with the same period in 2014. Lower sales of machinery products (-16.7%) offset a portion of the gains in aerospace.
Manufacturers in Alberta posted a 0.9% increase in sales, mainly as a result of gains in petroleum and coal products. Sales for the manufacturing sector in Alberta have been generally trending downwards ever since prices for petroleum refineries began to decline in July 2014. Sales for petroleum and coal products rose 6.6% in May and reached their highest level since December 2014.
Declines in multiple industries led to a 1.1% decrease in sales for Ontario manufacturers, the fourth drop for the province in 2015. Manufacturers in the transportation equipment industry posted the largest dollar decrease in May, down 1.1%, following two months of advances. Despite the downturn in May, sales of transportation equipment were 5.2% higher on a year-to-date basis compared with the same period in 2014. The provincial decrease also reflected lower sales of chemical products, machinery and computer and electronic products.
Inventories decrease after two consecutive gains
Inventories decreased 0.5% to $71.9 billion, following two consecutive gains. The decline reflected lower volumes of inventories on hand in the petroleum and coal industry.
The inventory-to-sales ratio edged down from 1.45 in April to 1.44 in May. The inventory-to-sales ratio measures the time, in months, that it would take to exhaust inventories if sales were to remain at the current rate.
Unfilled orders decline for fourth consecutive month
Unfilled orders fell 1.3% to $95.5 billion in May, the fourth consecutive monthly decline. The transportation equipment industry, in particular the aerospace industry, contributed to the monthly decrease. Orders fell 1.2% in transportation and 1.0% in the aerospace industry. Manufacturers in the fabricated metal and machinery industries also reported lower unfilled orders. The four months of declines represented a reversal of the previous upward trend for unfilled orders, which started in September 2014 and culminated in a record high in January 2015.
New orders rose 1.7%, as a result of growth in the aerospace product and parts industry. Gains in new orders for aerospace products partly reflected a stronger US dollar relative to the Canadian dollar. The advances were partially offset by declines in computer and electronic products, chemicals and fabricated metals.
Note to readers
Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified. For more information on seasonal adjustment, refer to the document Seasonally adjusted data – Frequently asked questions.
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. Production is used due to the extended period of time that it normally takes to manufacture products in those 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 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. For most respondents, the noon spot exchange rate on the last working day of the month is used for the conversion of these variables. Some manufacturers choose to report their data as of a day other than the last day of the month. In those instances the noon spot exchange rate of the day selected by the respondent is used. The noon spot exchange rate is available in CANSIM table 176-0067. 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.
Each month the Monthly Survey of Manufacturing releases preliminary estimates for the reference month and revised estimates for the three previous months. Revisions are made to reflect new information provided by respondents, and updates to administrative data. Once per year a revision project is undertaken where multiple years of data are revised. During annual revisions changes are made to our seasonal adjustment parameters.
Data from the June Monthly Survey of Manufacturing will be released on August 14.
For more information, contact us (toll-free 1-800-263-1136 or 1-514-283-8300; email@example.com).
To enquire about the concepts, methods or data quality of this release, contact Elizabeth Richards (613-863-4623; firstname.lastname@example.org) or Michael Schimpf (613-863-4480; email@example.com), Manufacturing and Wholesale Trade Division.
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