According to Statistics Canada, manufacturing sales fell 0.9 percent to $71.6 billion in July, the third consecutive monthly decline, on lower sales in 12 of 21 industries, led by the primary metal (-9.9 percent), petroleum and coal product (-5.3 percent), and furniture and related products (-11.2 percent) industries. Meanwhile, sales of food (+2.5 percent), motor vehicle parts (+10.7 percent), and paper products (+8.1 percent) industries increased the most.
Total inventory levels increased 1.2 percent to $118.1 billion in July, on higher inventories in 14 of 21 industries, led by the primary metal (+2.3 percent), machinery (+2.1 percent), and petroleum and coal (+2.4 percent) industries. The gains were partly offset by a 1.4 percent decline in inventories of chemical products. Higher prices of materials have been the main contributor to the increase in inventory levels since the beginning of the COVID-19 pandemic.
The inventory-to-sales ratio increased from 1.61 in June to 1.65 in July. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
The total value of unfilled orders was unchanged at $106.3 billion in July. Higher unfilled orders in the transportation equipment industry (+1.4 percent) were partially offset by declines of unfilled orders in the computer and electronic (-3.8 percent) and machinery (-2.0 percent) industries. Total unfilled orders were up 20.1 percent on a year-over-year basis in July.
The total value of new orders fell 5.3 percent to $71.6 billion in July, largely on declines of new orders of aerospace products and parts (-31.5 percent) and motor vehicles (-15.3 percent). The declines were partially offset by higher new orders in the motor vehicle part industry (+15.2 percent).
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector decreased from 79.6 percent in June to 76.9 percent in July, on lower production.
The capacity utilization rates fell in 18 of 21 industries in July and was noticeable in the wood product (-7.5 percentage points), machinery (-7.2 percentage points), primary metal (-6.5 percentage points) and chemical product (-6.4 percentage points) industries. The declines were partially offset by a higher capacity utilization rate in the petroleum and coal product industry (+5.3 percentage points).