According to Statistics Canada, manufacturing sales in Canada declined 0.7 percent to $57.1 billion in October, the second consecutive monthly decrease. Lower sales in the transportation equipment and fabricated metal product industries were partly offset by higher sales in the petroleum and coal product industry.
Sales were down in 11 of 21 industries, representing 48.8 percent of total manufacturing sales. Sales of durable goods fell 2.4 percent to $29.9 billion, while sales of non-durable goods rose 1.3 percent to $27.2 billion. In volume terms, manufacturing sales decreased 0.4 percent. The transportation equipment and fabricated metal product industries post the largest declines.
Sales of transportation equipment were down for the second consecutive month, falling 3.1 percent to $11.0 billion in October. The decline was mainly attributable to lower sales in the motor vehicle assembly (-4.7 percent) and motor vehicle parts (-4.6 percent) industries. This reflected lower activity at some assembly plants as well as at several parts plants which were impacted by the United Auto Workers strike in the United States. In constant dollars, sales volumes decreased 4.9 percent in the motor vehicle assembly industry and were down 4.0 percent in the motor vehicle parts industry in October.
Sales of fabricated metal products decreased 8.2 percent to $3.3 billion in October. This was the third decline in thirteen months. The decreases in October were widespread across the fabricated metal industries but more pronounced in the boiler, tank and shipping container as well as the other fabricated metal product industries. Sales of fabricated metal products in constant dollars were down 8.0 percent.
Inventory levels declined 0.4 percent to $87.6 billion in October, the second consecutive monthly decrease. Inventories were down in 10 of 21 industries, led by the paper (-4.8 percent), machinery (-1.9 percent), primary metal (-1.5 percent) and petroleum and coal product (-2.1 percent) industries. These decreases were partly offset by a 1.0 percent increase in transportation equipment inventories, due to higher levels of inventories of motor vehicles and motor vehicle parts.
The inventory-to-sales ratio increased from 1.53 in September to 1.54 in October, due to a larger decline in manufacturing sales than in total inventories. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Estimates of unfilled orders were revised upwards, to $99.0 billion in September, reflecting new information received from respondents.
Unfilled orders fell 1.5 percent to $97.6 billion in October. Overall, unfilled orders were down in 16 of 21 industries, with the largest decreases in the transportation equipment industry and the fabricated metal product industry.
New orders fell 4.9 percent to $55.6 billion in October, following two consecutive monthly gains. The decrease mostly reflected lower new orders in the transportation equipment industry and, to a lesser extent, the fabricated metal product and machinery industries.
The unadjusted capacity utilization rate for the manufacturing sector increased 0.8 percentage points, from 79.3 percent in September to 80.1 percent in October.
Overall, the capacity utilization rate rose in 12 of 21 industries in October, led by the petroleum and coal product industry, which increased 4.9 percentage points to 86.8 percent. The increase was mostly attributable to higher production at several refineries, which had shutdowns and maintenance during the previous months.