Canadian manufacturing sales up 0.8 percent in August

Thursday, 17 October 2019 19:57:51 (GMT+3)   |   San Diego
       

According to Statistics Canada, manufacturing sales rose 0.8 percent to $57.6 billion in August, following two consecutive monthly declines.

Sales were up in 11 of 21 manufacturing industries representing 62.9 percent of the total manufacturing sector. The transportation equipment and fabricated metal industries were mainly responsible for the growth in August. The petroleum and coal product industry posted the largest decline.

Sales in the transportation equipment industry increased 2.8 percent to $11.5 billion in August. All transportation equipment industries—except motor vehicle parts—reported higher sales in August. Sales in the motor vehicle industry rose 2.6 percent following a 4.6 percent decline in July and a 0.3 percent decrease in June. Sales in all major assembly plants began to ramp up in August after summer shutdowns that began in July and continued until early August. Production also increased in the aerospace product and parts industry and sales were up in the other transportation equipment industry.

Sales of fabricated metal products rose 3.6 percent in August following two consecutive monthly decreases. The gains in the fabricated metal industry were widespread but more pronounced in the architectural and structural metal industry. Sales of fabricated metal products in constant dollars were up 3.2 percent.

Sales were down in the machinery (-1.6 percent) and furniture and related products (-2.8 percent) industries.

Following a 0.4 percent increase in July, total manufacturing inventories rose 0.5 percent to $88.8 billion in August as a result of higher inventory levels in aerospace product and parts (+3.9 percent) and machinery (+1.4 percent) industries. The gains were partially offset by lower inventories in the primary metal and petroleum and coal products industries.

The inventory-to-sales ratio fell from 1.55 in July to 1.54 in August, due to a larger gain 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.

Since January 2017, inventories have generally increased, rising from $72.0 billion that month to $88.8 billion in August 2019, a gain of 23.4 percent. Over this period, total sales increased by 7.1 percent. As a result, the inventory-to-sales ratio has also risen, from 1.34 to 1.54. Such a rise in the inventory-to-sales ratio has not been observed in the United States manufacturing sector, where the ratio has typically remained in the 1.34 to 1.38 range over the 2017 to 2019 period.

Unfilled orders rose 0.8 percent to $98.1 billion in August. Higher unfilled orders of transportation equipment, in particular in the ship and boat building and the aerospace product and parts industries, were responsible for the growth.

After two consecutive monthly declines, new orders were up 6.1 percent to $58.3 billion in August. A large increase in new orders of aerospace product and parts was responsible for the gain.

The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increased 1.9 percentage points, from 77.5 percent in July to 79.4 percent in August.


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