Monthly Survey of Manufacturing, November 2015
Manufacturing sales increased 1.0% to $50.8 billion in November, led by higher motor vehicle sales in Ontario. These gains were partially offset by declines in sales of other transportation equipment, primary metals and petroleum and coal products.
In constant dollar terms, sales were up 1.0%, indicating that a higher volume of manufactured goods was sold.
Growth in motor vehicle and aerospace industries
Motor vehicle sales rose 3.8% in November, the sixth increase in seven months. Sales in November were 18.0% higher than they were in November 2014. Largely as a result of these gains, the motor vehicle industry's share of total manufacturing rose from 9.2% to 10.9%.
The increase in motor vehicle sales, both in November and in the 12 months to November, was largely the result of increases in the value of the vehicles assembled in Canada. In November, some companies reported changes in their production to higher-end and/or redesigned models. Moreover, since the beginning of 2015 all five of the largest motor vehicle assembly companies in Canada have shifted their production to either higher value models and trims, or upgraded versions of the vehicles they produce. In addition, factory gate prices of motor vehicles rose in 2015, reflecting the lower value of the Canadian dollar. According to the Industrial Product Price Index, the price of motor vehicles rose 12.8% in the 12 months ending in November.
Motor vehicle parts manufacturers benefited from the increased activity in the motor vehicle assembly industry. Sales of motor vehicle parts rose 2.6% in November, the fourth gain in five months.
Production of aerospace products and parts rose 11.5% in November as widespread gains were reported in the industry. The gains reflected in part a rise in the value of the US dollar relative to the Canadian dollar in the month. A substantial portion of inventories in the aerospace industry are held in US dollars and changes to inventories are used to calculate production in this industry.
As the aerospace industry is more volatile than manufacturing as a whole, examining data for the industry in three-month blocks can provide a more nuanced picture of developments in the industry. For the three months ending in November, aerospace production was 7.6% lower than in the three months ending in August.
Sales of miscellaneous manufactured goods rose 5.8% to just under $1 billion, following three months of lower sales. Year-to-date sales in the industry were up 7.0% while prices rose 2.3% year over year.
Electrical equipment, appliance and component manufacturers reported a 6.5% increase in sales to $863 million—the highest level reported by the industry since February 2014. However, year-to-date sales were 1.6% lower than in the same period in 2014.
Partially offsetting the gains were lower sales in the other transportation equipment, primary metal and petroleum and coal product industries. Sales of other transportation equipment fell 18.8%, the third decline in four months. Month-over-month price declines were recorded by the Industrial Product Price Index for the primary metal (-2.1%) and petroleum and coal product (-0.5%) industries.
Widespread gains in Ontario
Sales in Ontario grew 1.5%, the second consecutive gain, as motor vehicle manufacturers increased the value of their output by shifting production to higher-end and/or redesigned models. Motor vehicle parts sales rose 2.7%. Gains in Ontario were more widespread than the rest of the country, with higher sales reported in 18 of 21 industries, representing more than 90% of the sector in the province. Notably, sales of both primary metals and petroleum and coal products rose in Ontario, despite the fact that those industries posted two of the larger national declines in November.
Manufacturing sales in Ontario recorded their 8th increase in 12 months, with sales in November 4.9% higher than in November 2014. On a year-to-date basis, sales in Ontario were 1.6% higher in 2015 compared with the same period in 2014. This largely reflected weaker auto sales at the beginning of the year, which were due to retooling at motor vehicle assembly plants. It was the retooling at the beginning of the year that allowed some assembly plants to produce the higher priced models that are now driving the increase in sales.
Following four months of decline, sales in Quebec rose 1.2% in November, reflecting increased production of aerospace products and parts. Unlike Ontario, manufacturing in Quebec did not experienced sustained gains from January to November 2015. Manufacturers in Quebec have reported seven months of declines and four months of increases in 2015. As such, year-to-date sales were 0.8% lower than for the same period in 2014, while sales in November 2015 were 0.9% lower than in November 2014.
Manitoba manufacturers reported a 4.9% increase in sales on the strength of a 42.0% gain in the machinery industry. Machinery sales tend to be more volatile than overall manufacturing sales in the province. Sales in Manitoba increased for the fifth time in seven months and were at their highest level since December 2014.
A 4.1% decrease in sales in New Brunswick partially offset the increases. Manufacturing sales in the province have recorded 6 declines in 11 months and were at their lowest level since October 2009.
Total manufacturing inventories remained at $73.3 billion in November, as higher inventories of transportation equipment, and petroleum and coal products were offset by lower inventories of primary metals and machinery. In each of the 21 industries, inventory levels moved by less than 2.0%. Inventory levels were 3.1% higher than in November 2014.
The inventory-to-sales ratio fell from 1.46 in October to 1.44 in November. 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 fall
Unfilled orders fell for the 9th time in 10 months, down 0.3% to $93.3 billion in November. The decline reflected widespread decreases in orders in the fabricated metal product and railroad rolling stock industries.
The decline would have been more substantial had it not been for the increase in the value of the US dollar compared with the Canadian dollar. Many Canadian manufacturers, particularly in the aerospace industry, hold their unfilled orders in US dollars. The gain in the US dollar increased the value of aerospace unfilled orders when these were converted to Canadian dollars.
New orders rose 3.5% as a result of an increase 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, please refer to the following document: Seasonally adjusted data – Frequently asked questions.
For more information on trend-cycle data, see Trend-cycle estimates – 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. 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. Note that 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 in CANSIM table 176-0067.
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 the seasonal adjustment parameters.
Real-time CANSIM tables
Data from the December 2015 Monthly Survey of Manufacturing will be released on February 16, 2016.
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To enquire about the concepts, methods or data quality of this release, contact Jeff Paul (613-951-7328; email@example.com) or Michael Schimpf (613-863-4480; firstname.lastname@example.org), Manufacturing and Wholesale Trade Division.
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