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Monthly Survey of Manufacturing, March 2018

Released: 2018-05-16

Manufacturing sales rose 1.4% to $57.1 billion in March. Higher sales at primary metal; aerospace product and parts; fabricated metal product; and the other transportation equipment industries were mostly responsible for the increase.

Overall, sales were up in 13 of 21 industries, representing 72% of the Canadian manufacturing sector.

Chart 1  Chart 1: Manufacturing sales rise
Manufacturing sales rise

In volume terms, manufacturing sales rose 0.6%.

The primary metal and aerospace product and parts industries post the largest gains

Primary metal sales rose 4.2% to $4.4 billion in March following a 4.4% increase in February. While the growth in sales in dollar terms was widespread, the iron and steel mills and ferro-alloy as well as the alumina and aluminum production and processing industries posted the largest sales gain in March.

In the aerospace industry, production rose 10.6% in March following a 4.0% gain in February. The depreciation of the Canadian dollar contributed to a rise in the value of sales and inventories. Most sales and inventories held in the industry are priced in US dollars, and both are key components in the calculation of aerospace production.

Sales were also up in the fabricated metal product (+4.6%), other transportation equipment (+37.4%) and wood product (+3.7%) industries.

These increases were partially offset by declines in the motor vehicle (-2.0%), machinery (-1.7%) and computer and electronic product (-3.4%) industries.

Sales up in seven provinces

Sales were up in seven provinces in March, with Quebec and British Columbia responsible for most of the total national gain.

In Quebec, sales rose 2.9% to $13.8 billion in March, mainly due to a 21.3% increase in the aerospace product and parts industry. Sales also rose in the primary metal; machinery; and fabricated metal product industries.

Sales in British Columbia increased 4.0% to $4.6 billion in March, following four consecutive monthly declines. The increase was largely attributable to higher sales in the wood product industry.

In Saskatchewan, sales rose 5.6% to $1.5 billion. Higher sales in the food industry (+27.7%) were responsible for the gain. Greater availability of rail cars in March allowed more food products to be processed and shipped, leading to higher sales compared with February. Excluding the food industry, sales in the province declined 1.4%.

Sales were down in Manitoba, Nova Scotia and Prince Edward Island due to lower sales of durable goods.

Inventory levels rise

Chart 2  Chart 2: Inventories rise
Inventories rise

Inventory levels increased 0.7% to $79.3 billion in March. This was the sixth consecutive increase in inventories, with 6 of 21 industries posting higher levels. The gains were attributable to the transportation equipment (+3.5%), chemical (+5.9%) and plastic and rubber products (+5.3%) industries.

Chart 3  Chart 3: The inventory-to-sales ratio declines
The inventory-to-sales ratio declines

The inventory-to-sales ratio declined from 1.40 in February to 1.39 in March. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to continue at their current pace.

Unfilled orders increase

Unfilled orders rose 1.5% in March to $88.6 billion, a second consecutive monthly increase. The advance reflected a gain in the aerospace product and parts industry, up 2.4% to $47.1 billion, representing more than half of total unfilled orders.

Chart 4  Chart 4: Unfilled orders increase
Unfilled orders increase

New orders fell 0.7% to $58.5 billion, following a 7.4% increase in February. The decline in March was mainly the result of lower new orders in the aerospace product and parts; machinery; and the motor vehicle industries.




  Note to readers

Starting with the May 2018 release of March data, estimates for the Monthly Survey of Manufacturing are being calculated using a new sample. The sample design has been modified to improve efficiency. The sample is periodically refreshed to take advantage of improvements made to the Business Register since the last sample selection, reflecting births, deaths and other changes to the survey population.

In addition, the survey estimation methodology has been enhanced to use more administrative data. Seasonal adjustment specifications and factors were reviewed and updated.

The data have been revised using historical linkage factors designed to preserve the continuity of the time series. The linkage method leads to larger revisions for more recent periods. Unadjusted estimates of sales of goods manufactured, inventories and orders in CANSIM tables 304-0014 and 304-0015 have been revised back to January 2013 and back to January 2011 for the seasonally adjusted data.

Real manufacturing sales, orders, inventory owned and inventory estimates in CANSIM table 377-0010 have been revised back to 2002, reflecting a change in the base year from 2007 to 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 377-8010 will be updated on May 28. For more information, consult the document Real-time CANSIM tables.

Next release

Data from the Monthly Survey of Manufacturing for April 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).

For more information, or to enquire about the concepts, methods or data quality of this release, contact Bechir Oueriemmi (613-951-7938; bechir.oueriemmi@canada.ca) or Michael Schimpf (613-863-4480; michael.schimpf@canada.ca), Manufacturing and Wholesale Trade Division.

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