Monthly Survey of Manufacturing, April 2016
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Released: 2016-06-15
Manufacturing sales rose 1.0% to $50.4 billion in April, following two consecutive monthly declines. The increase in April reflected higher sales in the petroleum and coal product, transportation equipment, and primary metal industries.
Sales increased in 10 of 21 industries, representing 55% of Canadian manufacturing sales.
In constant dollar terms, sales were up 1.4%, indicating that higher volumes of manufactured goods were sold in April. Prices for the manufacturing sector fell 0.5%, according to the Industrial Product Price Index.
Chart 1
Manufacturing sales increase in April following two consecutive monthly declines
Sales of petroleum and coal products increase in April
Sales in the petroleum and coal product industry were up 8.3% to $4.1 billion in April, following a 13.4% increase in March. Higher petroleum prices contributed to the gain. Petroleum and coal product prices rose 2.5% in April, according to the Industrial Product Price Index.
Transportation equipment sales increased 2.1% to $11.0 billion, reflecting higher sales in most sub-industries. Production in the aerospace products and parts industry was up 6.3% to $1.7 billion. In this industry, there is generally a large gain in unadjusted production in March, followed by a subsequent decrease in April. Due to lower production in March this year, the decline in April was not as strong as usual, leading to a seasonally adjusted increase in production for the aerospace industry.
Sales in the railroad rolling stock industry advanced 39.5% to $202 million, the third increase in four months. Sales in this industry tend to be volatile compared with transportation equipment as a whole, due to the nature of the business.
Sales of primary metals were up 3.9% to $3.7 billion in April. This was the industry's fourth sales increase in five months.
Sales rise in Alberta, Quebec and Ontario
Sales increased in six provinces, with Alberta, Quebec and Ontario posting the largest gains.
Sales in Alberta increased 3.5% in April, following a 0.1% rise in March. The gain in Alberta was the result of a 19.6% advance in sales of petroleum and coal products. Despite the gain this month, sales in Alberta were $678 million (-11.8%) lower than in April 2015.
Sales in Quebec increased 1.4% to $11.6 billion, following three months of declines. Production in the aerospace product and parts industry was up 11.2% to $971 million. Higher sales of petroleum and coal products also contributed to the provincial gain.
Following two months of declines, sales in Ontario were up 0.4% to $24.9 billion. The gain in April was mainly the result of higher sales in the primary metals industry, which advanced 10.1% to $1.5 billion. Sales of transportation equipment increased 0.9% to $8.9 billion, the 9th gain in 12 months.
Inventories decrease
Inventories fell for the third consecutive month in April, decreasing 0.4% to $70.9 billion, the lowest level since December 2014. Inventories dropped in 15 of 21 industries. Transportation equipment recorded the largest decrease, with inventory levels down 1.2%. The decline was the result of lower inventories of aerospace products and parts (-1.4%), motor vehicles (-1.7%), and motor vehicle parts (-1.5%). These declines were partly offset by higher inventories of primary metals (+2.0%).
The decrease in inventories of aerospace products and parts partly reflected a stronger Canadian dollar relative to the US dollar in April. Inventories are mainly held in US dollars in the aerospace industry, so currency fluctuations will influence their value.
Chart 2
Inventories decline for the third consecutive month
The inventory-to-sales ratio dropped from 1.43 in March to 1.41 in April. 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 declines
Unfilled orders increase
Unfilled orders rose in April, following two consecutive monthly declines. This was the second increase in nine months. Unfilled orders were 9.4% lower than in the same month the previous year. The gain in April was due to higher unfilled orders of aerospace products and parts (+1.4%).
The machinery industry also posted an increase in April. Unfilled orders were up 3.2%, following four months of declines.
Chart 4
Unfilled orders increase
New orders increased 7.9% in April, reflecting a substantial increase in the aerospace product and parts industry. The machinery industry and the petroleum and coal products industry also posted higher new orders in April.
Note to readers
Monthly data in this release are seasonally adjusted and expressed in current dollars unless otherwise specified. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
For more information on the 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 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.
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 24. For more information, consult the document Real-time CANSIM tables.
Next release
Data from the May Monthly Survey of Manufacturing will be released on July 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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