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Monthly Survey of Manufacturing, July 2017

Released: 2017-09-19

Manufacturing sales decreased 2.6% to $52.5 billion in July, following a 1.9% decline in June. The decrease was primarily the result of lower sales of motor vehicles and motor vehicle parts. Excluding motor vehicles and motor vehicle parts, manufacturing sales increased 0.2%.

Sales were down in 9 of 21 industries, representing 57% of the manufacturing sector. Sales of durable goods decreased 4.6%, while sales of non-durable goods declined 0.2%.

In constant dollars, sales were down 1.4% in July, indicating a decline in the volume of manufactured goods sold.

Chart 1  Chart 1: Manufacturing sales decline
Manufacturing sales decline

Transportation equipment drops as a result of lower motor vehicle and parts sales

Sales in the transportation equipment industry fell 13.8% to $9.6 billion in July, for a second consecutive monthly decline. This is the largest monthly decrease since May 2009. The decrease was the result of declines in the motor vehicle (-19.9%) and the motor vehicle parts (-11.3%) industries. Motor vehicle assembly plants have annual shut downs during the summer months. This year, the shutdowns were longer and more concentrated in the month of July compared with previous years. Changes to vehicle models being manufactured in Canada also contributed to the decline. Sales of motor vehicle parts closely track production at the motor vehicle assembly plants. In constant dollars, motor vehicle sales were down 17.5%, while motor vehicle parts decreased 9.3%.

Decreases were also seen in the food industry (-0.9%), particularly in the meat product and seafood product and packaging sub-industries. In real terms, sales in the food industry declined 0.6%, reflecting a decrease in the volume of goods sold.

These declines were partially offset by increases in wood products (+2.3%), primary metals (+1.9%) and non-metallic mineral products (+4.4%). Sales in constant dollars for these industries increased 2.1%, 4.9% and 4.5%, respectively, indicating that higher volumes of goods sold were responsible for the gains.

Sales fall in Ontario

Sales decreased in seven provinces in July, led by Ontario and Alberta.

Sales in Ontario decreased 6.1% to $24.1 billion in July, the largest decrease since January 2009. The decrease in July was attributable to motor vehicles (-20.8%) and motor vehicle parts (-11.5%).

The sales decline of 3.4% in Alberta was driven by decreases in chemicals (-6.5%), fabricated metal products (-8.3%), petroleum and coal products (-3.0%) and food (-2.1%). Year over year, both food and fabricated metal products were up 4.4% and 13.2%, respectively. The decrease in food comes after five consecutive monthly increases.

In Quebec, sales rose 4.3% to $13.0 billion with 16 of 21 industries posting an increase. The growth was partly attributable to the primary metals industry (+9.1%). Sales also increased in the transportation equipment (+5.2%), wood product (+7.3%) and food (+2.4%) industries.

Inventories edge down

Inventories for the manufacturing sector edged down 0.2% to $73.7 billion in July. This was the third consecutive monthly decline.

The majority of the decreases came from aerospace product and parts (-2.4%), followed by primary metals (-0.9%), food (-0.7%) and chemicals (-0.6%).

Chart 2  Chart 2: Inventory levels edge down
Inventory levels edge down

The inventory-to-sales ratio increased from 1.37 in June to 1.40 in July. The increase in the ratio reflects the fact that the decline in sales was larger than the decline in inventories. 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 fell 1.7% to $86.2 billion in July, the third consecutive monthly decline. Most of the decrease was due to a drop in unfilled orders in the aerospace product and parts (-3.9%) industry.

These declines were partially offset by an increase in unfilled orders in machinery (+2.9%) and fabricated metal products (+1.9%).

Chart 4  Chart 4: Unfilled orders decline
Unfilled orders decline

New orders declined 1.7% to $51.1 billion in July. The decrease mostly reflected lower new orders in motor vehicles, and in aerospace product and parts. These declines in July were partially offset by higher new orders in fabricated metal products, and in computer and electronic products.

Telling Canada's story in numbers; #ByTheNumbers

In celebration of the country's 150th birthday, Statistics Canada is presenting snapshots from our rich statistical history.

Food and beverage products have always been important to the Canadian manufacturing sector. In 1870 (three years after Confederation), the food and beverage manufacturing industries employed 12,413 people and produced a total output of $63.4 million. By 1917, these industries had grown to employ 64,862 people and contributed $790.0 million in total output. Spurred by population growth, the increased use of refrigeration, growing consumer demand for more processed foods, and technological developments in the manufacturing sector as a whole, the next 50 years saw advancements in both output and employment.

In 1967, total employment in the industries had grown to 228,748 employees (approximately 14% of the Canadian manufacturing workforce), while the value of shipments had expanded to $7.4 billion (approximately 19% of Canadian manufacturing output). In 2016, manufacturers of food and beverages reported the value of shipments at $109.3 billion (approximately 18% of Canadian manufacturing output) and reported their number of employees at 256,456 (approximately 18% of the Canadian manufacturing workforce).




  Note to readers

Unadjusted data for sales of goods manufactured, inventories and orders have been revised back to January 2014, while seasonally adjusted data have been revised back to January 2012. These important data changes are the result of the following:

1) Data comparisons between the Monthly Survey of Manufacturing and the Annual Survey of Manufactures and Logging Industries. 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) Revisions to the constant dollar series back to January 2012.

Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.

For information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions. For 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 metals, 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 and shipbuilding industries, the value of production is used instead of the value of sales of goods manufactured. The value of production is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured. The value of 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 176-0081. 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 the last working day of the month and the monthly average exchange rate. Noon spot exchange rate data are available in CANSIM table 176-0080.

Real-time CANSIM tables

Real-time CANSIM tables 304-8014, 304-8015 and 377-8009 will be updated on October 2. For more information, consult the document Real-time CANSIM tables.

Next release

Data from the Monthly Survey of Manufacturing for August will be released on October 18.

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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