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Monthly Survey of Manufacturing, September 2016

Released: 2016-11-16

Manufacturing sales rose for the fourth consecutive month, up 0.3% to $51.5 billion in September. The gain reflected higher sales in the transportation equipment and fabricated metal industries.

Sales were up in 12 of 21 industries, representing 70.1% of the total manufacturing sector.

In constant dollar terms sales edged down 0.2%, indicating that lower volumes of manufactured goods were sold in September. Prices for the manufacturing sector rose 0.4% in September according to the Industrial Product Price Index.

Chart 1  Chart 1: Manufacturing sales increase
Manufacturing sales increase

Transportation equipment and fabricated metal product sales rise

Sales in the transportation equipment industry rose 1.5% to $10.6 billion in September. The advance was the result of gains in the railroad rolling stock (+72.6%), the motor vehicle (+1.3%) and the aerospace product and parts (+3.8%) industries. The increase in the transportation equipment industry accounted for more than 85% of the total gain in manufacturing sales.

Fabricated metal product producers reported a 2.4% increase in sales to $2.7 billion, following two consecutive monthly declines. The gain in September was the largest since May 2015 and stemmed from higher sales in the architectural and structural metals, machine shops, and other fabricated metal products industries.

These increases were partly offset by a 3.4% decline in the primary metal product industry to $3.8 billion. The decline in September follows two consecutive gains and was concentrated in the iron and steel mills and ferro-alloy industry and in primary production of alumina and aluminum.

Sales increase in half the provinces

Sales were up in five provinces in September. Quebec and Ontario reported the largest gains, which were partly offset by lower sales in New Brunswick.

Sales rose 1.7% in Quebec, the fifth increase in six months. Production in the aerospace products and parts rose 9.2%. An increase of this magnitude is not unusual for the industry, as aerospace production is substantially more volatile than the manufacturing sector as a whole. Sales of electrical equipment appliance and component (+10.9%), food (+1.4%) and primary metals (+1.2%) industries also contributed to the provincial gain.

In Ontario, sales increased 0.3% to $25.1 billion, mostly reflecting gains in the machinery, transportation equipment and fabricated metal industries. Overall, 13 of 21 industries reported higher sales in September, representing 77.4% of total manufacturing in the province. Sales in Ontario were 3.3% higher this September than in September 2015.

Conversely, sales were down 6.8% in New Brunswick, mainly reflecting lower sales of non-durable goods.

Inventories rise

Inventories in the manufacturing sector rose 0.5% to $70.3 billion in September. Higher stocks in the transportation equipment, food, and chemical industries all contributed to the increase.

Chart 2  Chart 2: Inventories rise
Inventories rise

The inventory-to-sales ratio increased from 1.36 in August to 1.37 in September. 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 increases
The inventory-to-sales ratio increases

Unfilled orders decline

Unfilled orders declined for the third consecutive month, down 0.2% to $88.6 billion in September. The decrease came mostly from lower unfilled orders in the fabricated metal product, electrical equipment appliance and component, and computer and electronic industries.

These declines were partly offset by an increase in unfilled orders in the aerospace product and parts and machinery industries.

Chart 4  Chart 4: Unfilled orders decrease
Unfilled orders decrease

New orders rose 2.3% to $51.3 billion in September, as a result of gains in the transportation equipment and machinery industries.




  Note to readers

Unadjusted data for sales of goods manufactured, inventories and orders have been revised back to January 2013, while seasonally adjusted data have been revised back to January 2011. These important data changes are the result of the following:

1) Data comparisons between the Monthly Survey of Manufacturing and the 2014 Annual Survey of Manufactures and Logging. This is an annual process to ensure that the data received for the largest units in both the annual and monthly surveys are consistent.

2) New information received from respondents and the availability of more up-to-date administrative data.

3) Updates to X-12-ARIMA seasonal adjustment models. As in past years, trading-day weights and analysis of trends, levels and moving averages have been updated and revised. This ensures that the seasonally adjusted data accurately reflect the latest developments in manufacturing.

4) Revisions to the constant dollar series back to January 2011.

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 the trend-cycles, 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 as well as 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 these 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 the last working day of the month and the monthly average exchange rate. Noon spot exchange rate data are available in CANSIM table 176-0067.

Real-time CANSIM tables

Real-time CANSIM tables 304-8014, 304-8015 and 377-8009 will be updated on November 25. For more information, consult the document Real-time CANSIM tables.

Next release

Data from the October Monthly Survey of Manufacturing will be released on December 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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