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Monthly Survey of Manufacturing, August 2015

Released: 2015-10-16

Manufacturing sales edged down 0.2% to $52.1 billion in August, following three consecutive monthly advances. The largest declines were recorded in the petroleum and coal product, motor vehicle parts, and aerospace product and parts industries. However, these declines were largely offset by gains in the motor vehicle assembly and wood product industries.

Sales were down in 8 of 21 main industries, representing approximately half of the sector.

Constant dollar sales decreased 0.1%, indicating that the volume of goods produced by Canadian manufacturers edged down.

Sales declines largely offset by gains

In the petroleum and coal product industry, sales declined for a third consecutive month, falling 5.2% to $5.1 billion. The decrease mostly reflected a 4.7% decline in prices for petroleum and coal products, as recorded by the Industrial Product Price Index. The volume of products sold also decreased in August.

Chart 1  Chart 1 : Manufacturing sales edge down
Manufacturing sales edge down

Motor vehicle parts sales declined 4.4% to $2.5 billion. Normally, parts manufacturers report large gains in August as motor vehicle assembly plants ramp up production following regular shutdowns every July. This year, the sales gains reported by parts manufacturers were smaller than usual, leading to the decrease in seasonally adjusted sales for the industry.

Production in the aerospace product and parts industry was down 3.5% to $1.9 billion in August. Despite the decline in August, year-to-date aerospace production was up 12.1% in 2015 compared with the same period last year.

In the motor vehicle assembly industry, sales rose 6.7% to $5.7 billion following maintenance shutdowns in July. Some manufacturers reported selling more higher-end vehicles in August. The sales value in August was the highest recorded for the industry since March 2007.

Wood product sales were up 5.1% to $2.2 billion in August as a result of widespread gains in the industry. Wood product manufacturers in Quebec, British Columbia and Alberta posted gains.

Sales down in five provinces

Sales declined in five provinces in August, with Quebec, Alberta and New Brunswick posting the largest decreases. Higher sales in Ontario largely offset these declines.

In Quebec, sales were down 1.2% to $12.0 billion, mostly reflecting lower sales in the primary metal (-7.1%) industry. Sales were also down in the petroleum and coal product industry.

Alberta's manufacturing sales declined 1.9% to $5.7 billion in August, the 10th decrease since the sales peak of $6.9 billion in June 2014. The downward trend following the peak stems from lower sales of petroleum and coal products, machinery, chemicals and fabricated metal products. The decrease in August 2015 stemmed from lower sales in the machinery (-14.1%), petroleum and coal product (-2.5%) and fabricated metal product (-7.1%) industries.

Sales decreased 7.1% to $1.4 billion in New Brunswick, the fourth decline in 2015. The drop was caused by lower sales of non-durable goods in August.

In Ontario, sales rose 1.1% to $25.3 billion, the third consecutive gain. Higher sales in the motor vehicle assembly industry (+6.7%) were responsible for the provincial increase. Sales were also up in the primary metal industry (+5.1%). A 4.5% decline in the motor vehicle parts industry offset some of the gains.

Inventories rise

Inventories rose 0.5% in August to $73.4 billion. Inventories were up in 17 of 21 industries, led by gains in the aerospace product and parts (+1.5%), food (+1.2%), machinery (+1.2%) and computer and electronic product (+2.9%) industries. Most of the gain in the aerospace industry reflected the higher value of the US dollar relative to the Canadian dollar. Most of the inventories in the aerospace industry are held in US dollars. A 3.1% decline in petroleum and coal product inventories offset a portion of the gains.

Chart 2  Chart 2 : Inventories rise
Inventories rise

The inventory-to-sales ratio rose from 1.40 in July to 1.41 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.

Chart 3  Chart 3 : The inventory-to-sales ratio moves higher
The inventory-to-sales ratio moves higher

Unfilled orders edge up

Unfilled orders edged up 0.2% to $96.9 billion in August. Over half of the gain stemmed from a 0.3% increase in the aerospace product and parts industry. Unfilled orders in the aerospace industry reached $53.1 billion in August. Unfilled orders also rose in the railroad rolling stock and the fabricated metal product industries.

Chart 4  Chart 4 : Unfilled orders edge up
Unfilled orders edge up

New orders were down 5.6% as a result of declines 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. For more information on seasonal adjustment, refer to the following 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.

Production-based industries

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 on 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. However, some manufacturers choose to report their data as of a day other than the last day of the month. In these instances the noon spot exchange rate on the day selected by the respondent is used. Because of exchange rate fluctuations, the noon spot exchange rate on the day selected by the respondent can differ from both the exchange rate on last working day of the month and the monthly average exchange rate. Noon spot exchange rate data are available on CANSIM table 176-0067.

Revision policy

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. Statistics Canada will release revised monthly manufacturing data on November 16, 2015, in accordance with standard practices. Sales of goods manufactured, inventories, and orders in current dollars will be revised back to January 2009 for unadjusted data and to January 2007 for seasonally adjusted and constant dollar data. The revisions will be based on three sources: new information from respondents, the availability of more up-to-date administrative data, and comparison and reconciliation with the latest information available from the Annual Survey of Manufacturers and Logging. The seasonal adjustment parameters will also be reviewed and updated.

Real-time CANSIM tables

Real-time CANSIM tables 304-8014, 304-8015 and 377-8009 will be updated on October 27. For more information, consult the document Real-time CANSIM tables.

Next release

Data from the September Monthly Survey of Manufacturing will be released on November 16.

Products

The analytical paper "Manufacturing: The Year 2014 in Review," which is part of Analysis in Brief (Catalogue number11-621-M) is also available. From the Browse by key resource module of our website, choose Publications.

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca).

To enquire about the concepts, methods or data quality of this release, contact Michael Schimpf (613-863-4480; michael.schimpf@canada.ca), Manufacturing and Wholesale Trade Division.

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