Monthly Survey of Manufacturing, March 2016
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Released: 2016-05-17
Manufacturing sales decreased 0.9% to $50.0 billion in March, a second consecutive monthly decline. The decline in March mainly reflected lower sales of transportation equipment and primary metals.
Sales were down in 16 of 21 industries, representing 88.3% of Canadian manufacturing.
In constant dollar terms, sales were up 0.1% in March, indicating that higher volumes of manufactured goods were sold. Prices in the manufacturing sector were down 0.6% in March according to the Industrial Product Price Index.
Chart 1
Manufacturing sales decline for second consecutive month
Transportation equipment and primary metal sales decline
Transportation equipment sales fell 3.4% to $10.8 billion in March, mostly as a result of lower production of aerospace products and parts, motor vehicle parts, and other transportation equipment.
Production in the aerospace product and parts industry declined 7.0% to $1.6 billion in March, the third consecutive monthly decrease. The decline partly reflected an appreciation of the Canadian dollar relative to the US dollar. Much of the data in the aerospace industry are reported in US dollars.
In the motor vehicle parts industry, sales fell 4.1% to $2.5 billion in March. One factor behind the decrease in the seasonally adjusted sales was a slight decline in unadjusted sales for the industry. Normally, unadjusted sales increase in March, having risen an average of 11.9% over the last six years.
Other transportation equipment sales were down 31.8% to $207 million in March, reaching their lowest level since June 2010. Sales in this industry are volatile compared with sales in the transportation equipment industry as a whole.
Primary metal sales fell 5.6% to $3.5 billion in March, more than offsetting the gains registered in the previous three months.
In the petroleum and coal products industry, sales rose 11.3% to $3.7 billion in March, following nine consecutive monthly decreases. Gains were reported by most refineries, partly reflecting an increase in the prices of petroleum products, which were up 5.1% according to the Industrial Product Price Index.
Ontario manufacturers post the largest decline
Sales were down in five provinces in March, with Ontario posting the largest decrease.
Ontario manufacturing sales fell 1.9% to $24.8 billion in March, the second consecutive monthly decline. The decrease was mainly caused by lower sales in the transportation equipment (-2.7%) and primary metals (-6.9%) industries.
Sales in Quebec fell 1.4% to $11.5 billion in March, the third consecutive monthly decline. The decrease in March was the result of lower production in the aerospace product and parts industry (-9.3%) and lower sales in the primary metal industry (-6.3%).
The declines in Ontario and Quebec were partially offset by increases in New Brunswick, British Columbia, Saskatchewan, Alberta and Nova Scotia. Higher sales in these provinces were largely the result of gains in non-durable goods industries.
Inventories decrease
Inventories fell 0.4% to $71.2 billion in March, their lowest level since January 2015. This was the fifth decline in eight months. Inventories decreased in 13 of 21 industries.
Lower inventories for aerospace product and parts, primary metals, and wood product industries were responsible for most of the decline. The decrease in aerospace partly reflected a stronger Canadian dollar relative to the US dollar. Inventories in the aerospace industry are mainly held in US dollars; therefore, currency fluctuations will influence their value.
Chart 2
Inventories decrease
The inventory-to-sales ratio rose from 1.42 in February to 1.43 in March. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Chart 3
The inventory-to-sales ratio rises
Unfilled orders decline
Unfilled orders were down 3.0% to $87.1 billion in March, a second consecutive monthly decline. The decrease was mainly the result of lower unfilled orders in the aerospace product and parts, computer and electronic product, fabricated metal, and machinery industries.
In the aerospace product and parts industry, unfilled orders decreased 3.9% to $47.4 billion in March. Part of the decrease reflected a gain in the value of the Canadian dollar relative to the US dollar. Most unfilled orders in the aerospace industry are held in US dollars.
Chart 4
Unfilled orders decline
New orders were down 2.2% to their lowest level since September 2013. There were fewer new orders in the aerospace product and parts and primary metal industries.
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, see 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.
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 because of 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. 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.
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 a year, a revision project is undertaken to revise multiple years of data. During annual revisions, changes are made to the seasonal adjustment parameters.
Real-time CANSIM tables
Real-time CANSIM tables 304-8014, 304-8015 and 377-8009 will be updated on June 1. For more information, consult the document Real-time CANSIM tables.
Next release
Data from the April Monthly Survey of Manufacturing will be released on June 15.
Contact information
For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.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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