According to Statistics Canada, following seven consecutive monthly increases, manufacturing sales fell 2.0 percent to $71.6 billion in May, on lower sales in 11 of 21 industries. The decline was primarily driven by the motor vehicle (-31.9 percent), primary metal (-4.1 percent), and miscellaneous manufacturing (-10.8 percent) industries. Meanwhile, sales of petroleum and coal products (+5.4 percent) and machinery (+3.3 percent) increased the most.
Total inventory levels increased 1.6 percent to $113.9 billion in May, mainly on higher inventories in the machinery (+4.3 percent), motor vehicle (+13.0 percent) and petroleum and coal product (+2.9 percent) industries. Meanwhile, inventories of the miscellaneous (-7.2 percent) and aerospace product and parts (-1.1 percent) industries fell the most in May.
The inventory-to-sales ratio increased from 1.54 in April to 1.59 in May. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Following six consecutive monthly increases, the total value of unfilled orders declined 0.8 percent to $103.0 billion in May, the second highest level since March 2020. The decrease was mainly attributable to lower unfilled orders in the aerospace product and parts industry (-2.3 percent). Total unfilled orders were up 19.8 percent on a year-over-year basis in May.
The total value of new orders decreased 7.1 percent to $70.8 billion in May, largely due to a decline in new orders in the aerospace product and parts, motor vehicles, and chemical products industries.
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector decreased from 79.1 percent in April to 78.0 percent in May due to lower production.
The capacity utilization rates fell in 8 of 21 industries in May, with the largest declines seen in the transportation equipment (-12.8 percentage points), computer and electronic (-5.4 percentage points) and food (-0.5 percentage points) product industries. The declines were partially offset by a higher capacity utilization rate in the beverage and tobacco (+5.1 percentage points), machinery (+3.6 percentage points) and plastic and rubber (+3.1 percentage points) industries.