May manufacturing sales higher on petroleum, cars

For the fourth time in five months, Canada’s manufacturers sold more of their goods in May. Statistics Canada reports that manufacturing sales rose 1.6 per cent to $51.6 billion in May, largely due to higher sales in the petroleum and coal product and motor vehicle industries. Increases in sales were seen in more than half of all industries tracked, eleven out of twenty-one reporting higher volumes.

The biggest gain by industry was in motor vehicles, which increased 9.3 per cent to $4.9 billion, the highest level seen since January 2012. Sales at some plants returned to normal levels after shutdowns for part of April. The increase in auto sales was seen mostly in Ontario. Ontario’s manufacturing sales rose 2.3 per cent overall, to $24.1 billion, their highest level in six years. Most of that gain was in the motor vehicle industry.

Other industries showing big gains were petroleum and coal products, which increased 7.2 per cent in May. This reflected a more normal level of sales, Statistics Canada says, after maintenance and retooling shutdowns at some refineries in April.

Statistics-Canada-manufacturing-petroleum-auto-indusry-coal-aerospace-EDIWeekly
Source: Statistics Canada

Primary metal sales rose 2.4 per cent to $3.9 billion. Gains in the industry were widespread.

Among the manufacturing industries that experienced declines were Newfoundland’s non-durable goods, including seafood product preparation and packing which contributed to a 2 per cent decline in Canada’s food industry output. In Quebec, manufacturing slipped 0.4 per cent on declines in the food and paper industries, though these losses were partly offset by higher primary metal sales.

Inventories declined 0.6 per cent to $71.9 billion, the first decline in five months, largely on declines in petroleum and coal product inventories. As a result, the inventory-to-sales ratio, which expresses the time in months that would be required to exhaust current inventories, fell to 1.39.

Unfilled orders were also down, to $89.3 billion. This was largely a result of declines in the aerospace products and parts industry, where unfilled orders fell 2.2 per cent to $47.9 billion. A rise in the value of the Canadian dollar against the US dollar in May explains some of that drop in orders.

Unfilled orders rose 6.8 per cent to $7.2 billion in the machinery industry, the fourth increase in five months. With the advance in May, unfilled orders for the industry reached their highest level since July 2013. In the primary metal industry, unfilled orders advanced 20.1%, reaching their highest level since November 2008.

New orders edged down 0.1 per cent to $51.2 billion. Declines in the transportation equipment and food industries were largely offset by gains in the petroleum and coal product and primary metal industries.

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