According to Statistics Canada, manufacturing sales rose 2.3 percent in January to $53.1 billion, the highest level on record. Higher sales of motor vehicles, food, and motor vehicle parts were largely responsible for the gains. More than 85 percent of the increase in January came from these three industries. Conversely, sales of petroleum and coal products fell 5.9 percent as prices continued to decline in the industry.
Motor vehicle sales increased 9.6 percent in January to $6.6 billion, the highest level since November 2000. This was the largest increase in the industry since March 2015. The gains in the motor vehicle industry were the result of two key factors: changes in the industry toward higher-end models and the lower value of the Canadian dollar.
The motor vehicle parts industry recorded a 4.0 percent increase in sales to $2.7 billion. This was the fifth consecutive increase in motor vehicle parts sales, which reached their highest level since December 2006. Gains in the industry were widespread as parts manufacturers capitalized on increased demand from motor vehicle assembly plants.
Inventories rose 0.6 percent in January, the third increase in four months. Inventories rose in 16 of 21 industries, led by the transportation equipment industry. In 11 of the 16 industries with higher inventories, the gain was less than 2.0 percent.
The inventory-to-sales ratio fell from 1.39 in December to 1.36 in January, the lowest level since December 2014. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders advanced 0.4 percent in January, the first increase after five months of declines. Higher orders in the aerospace product and parts, fabricated metal product, and clothing industries were responsible for most of the gain.
New orders increased 6.8 percent in January, reflecting higher new orders in the aerospace, motor vehicle, food, and fabricated metal product industries.