Canada February Manufacturing Sales Report (Text)

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

Manufacturing sales advanced 2.6% to $49.6 billion, the largest increase since July 2011. The gain in February largely stemmed from higher sales in the transportation equipment, petroleum and coal product, food, and miscellaneous manufacturing industries. In total, sales rose in 14 of 21 industries, representing approximately 85% of Canadian manufacturing.

Constant dollar manufacturing sales increased 2.5%, indicating that most of the gain reflected higher sales volumes.

Sales of durable goods were up 3.7% to $25.1 billion, while non-durable goods sales rose 1.5% to $24.5 billion.

Sales gains led by transportation equipment

Sales in the transportation equipment industry rose 8.7% to $8.1 billion, the largest gain in percentage terms since January 2011. The gain was mostly attributable to a 13.5% advance in the motor vehicle assembly industry. A 15.5% increase in production in the aerospace product and parts industry also contributed to higher transportation equipment sales.

In the petroleum and coal product industry, sales increased 2.4% to $7.3 billion. A 6.5% rise in prices for the industry, as recorded by the Industrial Product Price Index, was behind the gain.

Food sales rose 1.9% to $6.9 billion, the largest increase since August 2011. Sales were up 10.9% in the miscellaneous manufacturing industry.

Sales rise in eight provinces

Sales rose in eight provinces in February, led by Ontario, Quebec and New Brunswick.

In Ontario, sales increased 3.3% to $22.4 billion. A 12.4% advance in the motor vehicle assembly industry accounted for approximately 60% of the provincial gain. The chemical industry (+4.2%) and the aerospace product and parts industry (+26.2%) also posted increases in February.

Manufacturing sales in Quebec rose 3.1% in February to $11.7 billion. In the aerospace product and parts industry, production increased 16.1% to $791 million. Sales in the petroleum and coal product and the chemical industries were also behind the provincial gain.

Sales rose 18.0% to $1.9 billion in New Brunswick as a result of gains in the non-durable goods industries.

In Newfoundland and Labrador, manufacturing activity dropped 32.8% to $435 million. Sales were also down in Nova Scotia (-2.6%).

Inventories rise

Manufacturing inventories rose 0.9% to $66.1 billion in February, the highest level since January 2009.

In the primary metal industry, inventories increased 3.9% to $7.9 billion. This was the fourth gain in five months.

Inventories in the aerospace product and parts industry were up 2.3% to $5.1 billion, the highest level since August 2009.

The computer and electronic product (+3.4%) and the petroleum and coal product (+1.9%) industries also posted higher inventory levels in February.

The inventory-to-sales ratio declined to 1.33 in February from 1.36 in January.

Growth in unfilled orders slows

Unfilled orders increased 0.4% to $69.6 billion in February, the fourth consecutive monthly gain. However, the advance in February was much smaller than the gains posted in each of the three previous months.

In the aerospace product and parts industry, unfilled orders rose 1.0% to $40.1 billion. The increase reflected a gain in the value of the US dollar relative to the Canadian dollar. A large proportion of aerospace unfilled orders are held in US dollars. Excluding the aerospace industry, unfilled orders for the rest of the manufacturing sector declined 0.5%.

A 19.1% decrease in unfilled orders in the food industry offset a portion of the gains. Unfilled orders in the food industry stood at $444 million in February.

New orders declined 4.0% to $49.9 billion. The decrease was caused by a decline in new orders received in the aerospace industry in February compared with January.

Note to readers

Monthly data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified. Preliminary data are provided for the current reference month. Revised data, based on late responses, are updated 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 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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