Manufacturing sector continued to gain in November

Though the news from the aerospace sector has not been good in January, with Bombardier announcing the layoff of 1,700 workers in Montreal earlier this week, and the unemployment numbers for December were worse than expected, with 46,000 jobs lost across the country, there was some good news from Statistics Canada. For the second month in a row, Canada’s manufacturing sector did better than expected in November. Manufacturing sales surpassed $50 billion in November, lifting them to the highest level in three years. The increase, Statistics Canada says, was largely due to gains in transportation equipment and machinery industries.

In transportation equipment, which includes aerospace and the auto industry, sales were up 6.1 per cent to $9.5 billion. Of that, $1.8 billion, representing a rise of 21.3 per cent, was in aerospace production. Such a major rise is not unusual, StatsCan points out, as the industry is more volatile than the manufacturing sector as a whole.

Statistics-Canada-manufacturing-aerospace-automotive-machinery-equipiment-transportation-EDIWeekly
Source: Statistics Canada

Auto sales rose a substantial 5 per cent, reaching $4.8 billion, their highest level since November 2007. This was enough for the auto industry to account for nearly a tenth (9.6 per cent) of all Canadian manufacturing in November. It has come a long way since reaching a low of just $1.6 billion in sales in January 2009.

The machinery industry also made strong gains, increasing sales by 5.4 per cent to $3 billion. This was the fourth gain for this sector in eleven months.

Looking at the provinces, Ontario posted the leading gains, with six others also seeing increases. Ontario’s sales went up 2.2 per cent to $23 billion, again, largely on the strength of the transportation equipment industry. Both auto sales and aerospace production rose, the latter by 44.9 per cent. The primary metal and machinery industries also contributed to the overall provincial advance.

Higher unfilled orders in the aerospace sector pushed that metric higher by 0.4 per cent to $72.2 billion. Unfilled orders for aerospace products rose to $41.9 billion, the eighth rise in eleven months. Statistics Canada says that this reflects the fact that the Canadian dollar has been weakening relative to the US dollar. Unfilled orders in the aerospace industry are held in US dollars.

A number of other industries, including primary metal, electrical equipment and computer and electronic products had declines in unfilled orders.

New orders rose 1.2 per cent to $50.8 billion as a result of increases in the machinery, aerospace product and parts as well as the motor vehicle industries.

These increases were offset somewhat by declines in the food and chemical industries, where sales were down 1.5 per cent to $7.5 billion and 2.3 per cent to $3.9 billion respectively.

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