According to Statistics Canada, Canadian manufacturing sales increased by $36.4 billion or 5.9 percent from 2016 to $648.9 billion in 2017. This was the largest increase since 2011, and it follows a 1.2 percent rise in sales in 2016. The growth was led by the non-durable goods industries, particularly in the petroleum and coal products and the food manufacturing industries.
Sales rose in every province and in 17 of 21 industries. The growth was partially offset by declines in sales from the transportation equipment manufacturing industry, especially motor vehicle manufacturing.
According to the Industrial Product Price Index, prices in the manufacturing sector increased 3.2 percent in 2017 compared with 2016, led by a gain of 13.4 percent in the petroleum and coal product industry.
Following an increase of 0.2 percent in 2016, sales in non-durable goods industries grew 8.2 percent or $23.3 billion in 2017, to $306.2 billion. Sales were up in 9 of 11 non-durable goods manufacturing industries. In constant dollars, non-durable goods industries sales volumes were up 4.4 percent.
Higher prices were primarily responsible for pushing petroleum and coal product industry sales up by 23.8 percent to $63.1 billion, the industry's highest annual sales level since 2014 when sales reached $83.2 billion.
Manufacturing sales in durable goods industries increased in 2017 by 4.0 percent or $13.1 billion to $342.7 billion, the fourth consecutive year of gains and the largest percentage increase since 2014. Despite a decline in current dollar sales in the transportation equipment industry, 8 of 10 durable goods industries posted higher sales in 2017, led by the machinery, primary metal, wood product and fabricated metal product industries.
Following three consecutive years of annual manufacturing sales growth, the transportation equipment industry declined 2.4 percent or $3.1 billion to $127.4 billion in 2017. An annual drop in sales of $3.4 billion (-5.0 percent) in the motor vehicle industry, due in part to factory shutdowns caused by labor disputes and retooling, drove the decline. The decline was partly offset by an increase in sales of 4.5 percent or $891 million in the aerospace product and parts industry.
Partially driven by higher demand from the oil and gas extraction sector, the machinery industry reported strong sales in 2017, up 18.4 percent to $37.0 billion. Higher prices for primary metals drove sales in the industry, up 10.8 percent to $50.2 billion.
In current dollar terms, monthly inventories began to increase in late 2016, ending the year at $70.1 billion. Total inventories continued to rise throughout the first quarter of 2017, before levelling off for the next two quarters at $74.0 billion. Inventories then rose in the fourth quarter, ending the year at $75.5 billion.
Monthly values of unfilled orders began 2017 by increasing for three of four consecutive months, reaching $90.8 billion in April, led by gains in the aerospace product and parts manufacturing industry. Monthly unfilled orders then decreased in six of the year's final eight months, reaching a 2017 low of $85.3 billion in September. The value of unfilled orders ended 2017 at $86.2 billion, 1.6 percent lower than in December 2016.
Canadian manufacturers employed 1.5 million Canadians in 2017, which represented 9.3 percent of total employment nationwide.
Employment in manufacturing depends on the number and size of industrial facilities in the country, as well as the relative labor intensity of each industry. In 2017, even though petroleum and coal products manufacturing was a leading source of manufacturing sales gains, the industry is capital-intensive and therefore a relatively small employer (18,039 jobs). Transportation equipment production was also a major employer, with 195,661 jobs.