Canada October Manufacturing Sales Report (Text)

The following is the text of Canada’s manufacturing shipments report for October released by Statistics Canada.

Manufacturing sales declined 1.4% in October to $48.8 billion, reflecting drops in the aerospace product and parts, the motor vehicle assembly, and the primary metal industries. These declines were partly offset by higher sales in the petroleum and coal product as well as the wood product industries.

Sales declined in 12 of 21 industries, representing approximately 71% of the manufacturing sector. Sales of durable goods decreased 2.9% to $24.7 billion while sales of non-durable goods rose 0.3% to $24.2 billion.

Constant dollar manufacturing sales fell 2.4% in October, indicating a decline in the volume of manufactured goods sold.

Production drops in the aerospace product and parts industry

Production in the aerospace product and parts industry dropped 25.4% to $1.3 billion, following a 37.1% increase in September. The aerospace industry is one of the more volatile industries in the manufacturing sector.

Sales in the motor vehicle assembly industry declined 3.7% to $4.4 billion, following a 3.6% decrease in September. Sales in the industry had reached a recent peak of $4.7 billion in August, the highest level since November 2007.

In the primary metal industry, sales were down 2.8% to $3.7 billion. The decrease largely reflected a lower volume of products sold.

Advances in the petroleum and coal product industry as well as the wood product industry offset a portion of the declines. In the petroleum and coal product industry, sales rose 2.0% to $7.4 billion. The gain stemmed entirely from higher sales volumes. In the wood product industry, sales increased 6.5% to $1.8 billion. Most manufacturers in the industry reported higher sales.

Sales down in six provinces

Sales were down in six provinces, though the decrease was concentrated in Ontario.

In Ontario, sales dropped 3.4% to $22.0 billion, reflecting lower sales in 17 of 21 industries. Just under half of the provincial decline stemmed from lower sales of transportation equipment. In the aerospace product and parts industry, production fell 45.9% to $212 million. Sales in the motor vehicle industry were down 3.5% to $4.3 billion. Lower sales in the primary metal (-8.7%) and petroleum and coal product (-6.3%) industries also contributed to the provincial decrease.

Manufacturing sales in Alberta declined 1.4% in October to $6.3 billion. A 7.2% drop in the food industry and a 3.7% decrease in petroleum and coal product sales were largely responsible for the provincial decline. A 5.7% rise in the machinery industry partly offset the decreases.

Sales rose 27.4% in Newfoundland and Labrador and 1.8% in British Columbia. A 30.1% rise in non-durable goods sales was responsible for the gain in Newfoundland and Labrador. In British Columbia, the sales increase reflected a 7.7% advance in the wood product industry.

Inventories advance

Inventories advanced 1.3% in October to $66.2 billion, the highest level since January 2009. Increases in the inventories of petroleum and coal products as well as aerospace product and parts were behind the gains.

In the petroleum and coal products industry, inventories rose 13.2% to $5.4 billion. The increase reflected a 12.8% gain in finished product inventories and a 26.4% rise in raw materials held by manufacturers.

In the aerospace product and parts industry, inventories were up 5.1% to $4.8 billion in October. The increase mostly stemmed from a gain in goods-in-process inventories.

The inventory-to-sales ratio advanced to 1.36 in October from 1.32 in September. The level in October was the highest since June 2011. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Total unfilled orders are flat

In October, total unfilled orders were unchanged at $61.9 billion from September. Gains in the aerospace product and parts industry and the electrical equipment, appliance and component industry were largely offset by declines in the fabricated metal product and machinery industries.

In the aerospace product and parts industry, unfilled orders increased 1.2% in October to $31.8 billion. Unfilled orders also advanced in the electrical equipment, appliance and component industry (+7.1%). This advance stemmed from higher unfilled orders reported by most manufacturers.

In the fabricated metal product industry, unfilled orders declined 2.8% to $6.3 billion. Unfilled orders decreased 1.9% in the machinery industry to $7.6 billion. In both industries, the decrease in unfilled orders was widespread.

New orders in October declined 0.6% to $48.8 billion, reflecting decreases in the fabricated metal product, computer and electronic product, and primary metal industries. Gains in the aerospace product and parts as well as the wood product industries offset a portion of the declines.

Note to readers

Preliminary data are provided for the current reference month. Revised data, based on late responses, are updated for the three previous months.

All data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified. For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends (http://www5.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=11-010- X201000311141&lang=eng) .

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 metal, 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.

To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net

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