Manufacturing sales increased 2.2% to $42.9 billion, the first increase since July 2008.

Ontario Leads the way with 7.2% gain

Statscan - Motor vehicle and motor vehicle parts industries in Ontario were behind most of the gains in February, following widespread slowdowns and shutdowns in January. Excluding motor vehicles and parts and accessories, manufacturing sales edged down 0.2%, the seventh monthly decline in a row.

Constant dollar manufacturing sales, which are measured in 2002 prices, rose 2.6% to $39.4 billion in February. This was the first increase in constant dollar sales since September 2008.

At the industry level, sales in 9 of 21 manufacturing industries increased in February, accounting for about 45% of total sales.

Motor vehicle manufacturers resume some operations

Motor vehicle and motor vehicle parts plants increased sales in February after numerous slowdowns and shutdowns in January. Motor vehicle manufacturers reported a 34.5% sales gain, while parts sales were up 38.5%. Despite February's increase, motor vehicle and parts sales remained approximately 40% below levels from a year earlier.

Primary metal manufacturers reported a 3.5% increase in February. Primary metal sales have fallen by one-third since October 2008, as a result of both price decreases and weakening global demand.

Petroleum and coal product sales decreased 3.3% in February following an 11.0% gain in January. Petroleum and coal product sales have fallen in seven of the previous eight months.

Chemical manufacturers reported that sales fell 2.1% in February, a sixth decrease in seven months. These losses were partially offset by gains earlier in 2008, leaving chemical product sales 9.1% lower than year-ago levels.

Ontario leads gains in February

Ontario led the way with a 7.2% increase in February following six months of decreasing sales. The main contributors to the advance were the motor vehicle (+36.2%) and motor vehicle parts (+41.7%) industries. Even with February's gain, total manufacturing sales in Ontario remained almost 20% below year-ago levels.

Excluding Ontario, manufacturing sales across the remainder of the country slipped 1.5% in February.

Newfoundland and Labrador (+8.4%) and Saskatchewan (+3.0%) were the other provinces with notable gains in February.

Manufacturing sales in British Columbia declined 2.5% in February, with decreases continuing to mount in the wood and paper product industries. Sales in Quebec decreased 2.3% as the transportation equipment industry fell 17.6%.

Inventory decline in February

Inventory levels decreased 1.0% in February to $66.9 billion, the third decline in four months. Both raw material inventories (-1.9%) and finished product inventories (-1.4%) fell during the month. These decreases were partially offset by a 1.4% increase in goods in process inventories, which rose for the fourth time in five months.

The decrease in inventories was widespread, with 19 of 21 industries reporting a drop.

The inventory-to-sales ratio decreased for the first time since July 2008, decreasing to 1.56 in February. The inventory-to-sales ratio rose from 1.25 in July 2008 to a 17-year high of 1.61 in January. Over the past three years, the inventory-to-sales ratio has averaged around 1.33.

Unfilled orders flat while new orders gain

The backlog of unfilled orders held steady at $67.1 billion in February (+0.1%) after decreasing the previous two months.

Aerospace manufacturers reported a 1.4% gain in unfilled orders during the month, after falling 4.8% in January.

Excluding the aerospace products and parts industry, unfilled orders fell 1.5% in February. Unfilled orders excluding aerospace have not increased since August 2008.

The gain in the aerospace industry was offset by a 4.7% decrease in unfilled orders by machinery manufacturers and a 3.4% decline for computer and electronic product manufacturers.

New orders gained 8.6% to $43.0 billion in February, rising from a 10-year low of $39.6 billion in January.

Note to readers

All data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.

Preliminary estimates are provided for the current reference month. Estimates, based on late responses, are revised for the three previous months.

Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.

Durable goods industries include wood products, non-metallic mineral products, primary metals, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.

Production-based industries

For the aerospace industry and shipbuilding industries, the value of production is used instead of sales of goods manufactured. This value is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured.

Unfilled orders are a stock of orders that will contribute to future sales assuming that the orders are not cancelled.

New orders are those received whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month.