According to Statistics Canada, manufacturing sales decreased 1.3 percent to $57.2 billion in July, following a 1.4 percent decline in June.
Sales were down in 11 industries in July, representing 66.8 percent of total manufacturing sales. The decline in July was mainly due to lower sales in the primary metal and motor vehicle industries. The food industry posted the largest gain.
Sales in the primary metal industry fell 7.3 percent in July following a 10.6 percent increase in June. In constant dollars, sales of primary metals were down 7.0 percent. Every primary metal industry except alumina and aluminum production and processing reported lower sales. In particular, sales of iron and steel mills and ferro-alloy products decreased 14.8 percent due to lower quantities sold and maintenance shutdowns at some plants.
Sales of motor vehicles decreased 4.7 percent in July, the second consecutive monthly decline. The decrease in motor vehicle sales was partially the result of an extended shutdown at a major assembly plant attributable to maintenance projects to support new model production. Sales of motor vehicles were nevertheless 1.0 percent higher than in July 2018.
Sales were also down in the fabricated metal product (-3.2 percent), railroad rolling stock (-26.7 percent), and computer and electronic product (-6.0 percent) industries.
Total manufacturing inventories rose 0.3 percent to $88.3 billion in July, following a 1.3 percent decline in June. Inventory levels have been on an upward trend since January 2017, decreasing four times over that period.
Inventories were up in 12 of 21 industries in July, led by the transportation equipment (+2.1 percent) and chemical (+1.7 percent) industries. The gains were partly offset by a 2.3 percent decrease in fabricated metal products inventory.
The inventory-to-sales ratio rose from 1.52 in June to 1.54 in July, due to lower sales and higher inventories. 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 fell 1.4 percent to $98.1 billion in July as a result of lower unfilled orders in the transportation equipment (-1.4 percent) and the fabricated metal product (-5.6 percent) industries. Unfilled orders rose in the chemical (+27.3 percent) and computer and electronic product (+1.4 percent) industries.
Following a 4.4 percent decrease in June, new orders fell 1.6 percent to $55.8 billion in July as a result of lower new orders in the transportation equipment (-5.5 percent) and fabricated metal product (-14.9 percent) industries.
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector declined 4.0 percentage points, from 81.3 percent in June to 77.3 percent in July. Overall, 16 of 21 industries posted a lower capacity utilization rate in July.