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Manufacturing Sales Edged Down 0.2% In January

ByThe National Bank of Canada
Published 03/20/2013, 07:33 AM
Updated 05/14/2017, 06:45 AM
NOTE
0.54%
FACTS:

Canada’s manufacturing sales edged down 0.2% in January after a 3.3% December slump. Sales declined for 7 of the 21 industries, representing 52% of the manufacturing sector. But the largest contributors were aerospace products (-19.7%), motor vehicles (-3.7%) and petroleum & coal products (-1.8%). On a regional basis, sales fell in 4 provinces out of 10: New Brunswick (-6.7%), Saskatchewan (-4.9%), Quebec (-2.7%) and Ontario (-0.8%). New orders jumped 5.1%, coming mostly from aerospace products (+44.5%) and machinery (+19.2%). Unfilled orders rose 5.8%, mostly from aerospace products (+10.0%). Inventories were up 1.7%, led by aerospace products and primary metals. The inventory-to-sale ratio was up 0.02 to 1.36, the highest level since June 2011. In real terms, manufacturing sales declined 0.4% in January, after a 3.9% dive the prior month.
About the same level than a year ago
Sales of the Canadian motor vehicle
Manufacturing sales in constant dollars
OPINION: With real manufacturing sales declining in 4 of the last 5 months (top chart), this morning’s report may seem discouraging. Note however, that manufacturing sales were up in January in 14 of the 21 industries. With a rather strong demand for new cars in the U.S., it is unlikely that motor vehicle assembly in Canada will continue for long at a depressed level (middle chart). There were encouraging signs in February, such as the rise in U.S. motor vehicle assembly as well as the rise in the U.S. manufacturing new orders component of the ISM. It was cooled down by a sizeable drop in Canadian manufacturing jobs, suggesting that upcoming improvement will not be stellar. In the meantime, early in Q1, manufacturing sales are down an annualized 8.9% from Q4 (bottom chart).

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