../Morning Post
Posted April 14, 2011

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Sales

Monthly Survey of Manufacturing

Statscan - Manufacturing sales declined 1.5% (-$720 million) in February to $47.1 billion, following a 4.4% gain in January. While lower sales were widespread, the decrease was mostly concentrated in the transportation equipment industry in Central Canada.

Constant dollar manufacturing sales fell 2.3% in February, following a 5.4% gain in January.

Lower sales were reported in 15 of 21 industries, representing 71.0% of total manufacturing.

Sales declines largely focused in the transportation equipment industry

Sales decreases were mostly concentrated in the motor vehicle assembly, motor vehicle parts and the aerospace product and parts industries.

Sales in the motor vehicle assembly industry fell 10.9% to $3.7 billion in February, following a 26.1% gain in January. The large rise in January reflected substantial gains in production at some plants, following weather-related slowdowns in December. Consistent with the drop in February for motor vehicle assembly, sales in the motor vehicle parts industry decreased 7.9%.

Production in the aerospace product and parts industry was down 11.3% to $1.1 billion, reflecting lower activity at several plants.

Sales fell 4.5% in the machinery industry to $2.5 billion. Despite the drop, sales in the industry have advanced in 9 of the past 12 months.

Offsetting the declines, sales advanced 23.1% in the miscellaneous manufacturing industry. Sales gains were also posted in the petroleum and coal products industry (+2.6%), reflecting both volume and price increases.

Central Canada accounted for most of the decrease

Most of the sales decrease was located in Central Canada. Combined sales in Ontario and Quebec fell by $646 million in February.

In Ontario, sales were down 1.6% to $21.7 billion, following a 5.6% increase in January. The decrease was largely caused by an 11.3% drop in sales in the motor vehicle assembly industry and an 8.2% decline in the motor vehicle parts industry. A substantial 42.5% rise in miscellaneous manufacturing and a 7.9% increase in the petroleum and coal products industry reduced the size of the provincial decrease.

Sales fell 2.5% in Quebec to $11.5 billion, the second decline in five months. A 23.7% drop in production by the aerospace product and parts industry was behind most of the provincial decline. The wood product (-9.4%), chemical (-5.3%) and machinery (-6.6%) industries also recorded sales decreases. A 6.7% rise in sales reported by petroleum and coal products manufacturers partly offset the decline in Quebec.

Sales fell in both Newfoundland and Labrador (-20.0%) and New Brunswick (-7.5%) in February. In both provinces, lower sales by manufacturers in the non-durable goods industries were largely responsible for the declines.

On the upside, sales increased 1.4% to $5.5 billion in Alberta. The advance mostly reflected increased activity in the petroleum and coal products industry (+9.5%).

Inventory levels edge downward

Inventories held by manufacturers edged down 0.3% in February to $61.6 billion, the first decrease in five months. Declines in inventory levels were reported by manufacturers in 10 of 21 industries, led by a 7.3% decline in the petroleum and coal product industry. Lower volumes of crude petroleum were reported by some refineries. Transportation equipment (-2.3%) and food (-1.2%) also contributed to the overall decrease in inventories held by manufacturers.

Higher inventory levels were reported by manufacturers in the primary metal industry (+2.8%), reflecting increases in price and volume. Inventories also rose in the fabricated metal product (+2.0%), paper (+3.8%) and wood product (+2.6%) industries.

The inventory-to-sales ratio increased from 1.29 in January to 1.31 in February. Despite the advance, the ratio has declined gradually over the past year.

Unfilled orders advance

Total unfilled orders advanced 0.4% to $52.7 billion in February, the second consecutive increase following four months of declines. Gains were posted in the machinery (+4.9%), fabricated metal product (+3.0%) and primary metal (+10.8%) industries.

Excluding the aerospace product and parts industry, unfilled orders in the manufacturing sector rose 1.2%, the largest increase since October 2010. In the aerospace industry, orders declined 0.8% to $21.5 billion, offsetting most of the overall advance.

A 4.7% decline in unfilled orders in the computer and electronic products industry also partly offset the overall rise in orders.

New orders decreased 2.6% to $47.3 billion in February. The main contributors to the decline included the aerospace product and parts and motor vehicle industries.

r revised
p preliminary
1. Percent change calculated at thousands of dollars.

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