According to Statistics Canada, manufacturing sales increased for the third consecutive month in July, rising 0.9 percent to $58.6 billion. Higher sales in the transportation equipment and chemical industries drove the increase.
Overall, sales were up in 11 of 21 industries, representing 68 percent of total manufacturing sales. Non-durable goods rose 1.4 percent to $27.7 billion, while durable goods increased 0.5 percent to $30.9 billion.
The gain in the transportation equipment industry accounted for more than half of the total increase in Canadian manufacturing sales in July. Sales in the industry were up 2.6 percent to $10.9 billion, mostly as a result of gains in the motor vehicle and the railroad rolling stock industries. In July, scheduled shutdowns for some assembly plants were shorter than in previous years. Sales in the motor vehicle assembly industry rose 3.0 percent to $5.4 billion, a second consecutive monthly increase. Sales in the railroad rolling stock industry were up 63.4 percent to $275 million, following a 30.4 percent decline in June. Sales in this industry tend to be volatile compared with transportation equipment as a whole.
In the petroleum and coal product industry, sales were up 2.4 percent to $6.5 billion. With the increase in July, sales were at their highest level since October 2014 and reflected higher production in most refineries. In constant dollars, sales in this industry were up 1.5 percent in July.
These increases were partially offset by declines in the aerospace product and parts (-5.7 percent), furniture and related product (-6.9 percent) and fabricated metal product (-2.0 percent) industries.
Total manufacturing inventories increased 1.2 percent to $82.9 billion in July. The gains were led by higher inventories in the machinery (+3.0 percent) and the petroleum and coal product (+3.5 percent) industries. Inventories of aerospace product and parts equipment declined 1.5 percent.
The inventory-to-sales ratio was unchanged at 1.41 in July. The ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders were unchanged at $94.4 billion in July, following five consecutive monthly gains. The largest increase in unfilled orders was posted by the motor vehicle industry, followed by the electrical equipment, appliance and component industry.
These increases were offset by a decline in unfilled orders in the aerospace product and parts industry, as well as in the primary metal industry.
New orders decreased for a second consecutive month, down 1.8 percent to $58.6 billion in July. The decline mostly reflected lower new orders in the aerospace product and parts industry and in the machinery industry.
The manufacturing sector capacity utilization rate, unadjusted for seasonal effects, decreased 4.6 percentage points, from 83.5 percent in June to 78.9 percent in July. While declines were widespread, the transportation equipment industry contributed the most to the decrease in July. The capacity utilization rate in the industry fell from 88.3 percent in June to 74.6 percent in July. Shutdowns at several auto manufacturing establishments were responsible for the lower rate.