Canada: Monthly Survey of Manufacturing, November 2016

Manufacturing sales rose 1.5% in November to $51.8 billion, following a 0.6% decline in October. The increase was mainly the result of higher sales in the primary metal, petroleum and coal product, and chemical manufacturing industries.

Sales were up in 14 of the 21 industries, representing 68% of Canadian manufacturing sales.

In constant dollars, sales rose 1.2%, indicating that a higher volume of manufactured goods was sold in November. Prices for the manufacturing sector increased 0.3%, according to the Industrial Product Price Index.

Primary metal manufacturing sales lead the gain

Primary metal manufacturing sales rose 9.1% to $4.0 billion following two months of decline. This was the largest gain in dollar terms since April 2012. The increase in sales was widespread among all five primary metal manufacturing industries. However, the non-ferrous metal production and processing and the iron and steel pipes and tubes manufacturing industries posted the largest sales gain in dollars in November.

Petroleum and coal product sales increased 3.7% to $4.5 billion in November, their highest level since September 2015. The gain in November was mainly attributable to higher volumes reported by several oil refineries following partial shutdowns in September and October for maintenance and retooling work.

Sales in the chemical manufacturing industry rose 3.4% to $4.4 billion, the fifth increase in six months. A large part of the gain in November was from higher sales in petrochemical as well as pharmaceutical and medicine manufacturing.

Sales of wood products (+3.8%), food (+0.9%) and machinery (+2.7%) also increased in November.

In contrast, sales in the transportation equipment industry decreased 2.3% to $10.3 billion. The decline was mainly the result of decreases in the aerospace product and parts industry (-7.4%) and the other transportation equipment industry (-26.8%), which had posted a significant increase the previous month.

Sales up in every province except New Brunswick

Sales were up in nine provinces in November, led by Quebec and Alberta. Increases in these provinces were largely responsible for the total national gain. New Brunswick was the lone province to see a decline.

Following a 1.5% decrease in October, sales in Quebec rose 3.0% to $12.1 billion. The provincial increase was mainly due to higher sales in the petroleum and coal product and the primary metal manufacturing industries (+10.6%). Meanwhile, sales in the transportation equipment industry decreased 13.5%.

In Alberta, sales rose 3.9% to $5.4 billion in November, following two monthly decreases. Increases were recorded in 16 of the 21 industries, largely driven by a 4.7% increase in the chemical products industry and a 3.8% gain in the food industry.

In New Brunswick, manufacturing sales fell 2.4% to $1.3 billion, due to weaker sales of non-durable goods. This was the third consecutive monthly sales decline in this province.

Inventory levels fall

Inventory levels decreased 0.2% to $70.0 billion in November, following two consecutive monthly increases.

Inventories were down in 11 of 21 industries, with the aerospace product and parts (-2.5%), petroleum and coal products (-2.3%) and wood product (-2.2%) industries posting the largest declines. These declines were partially offset by a 1.7% increase in chemical product inventories.

The inventory-to-sales ratio declined from 1.38 in October to 1.35 in November. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled orders are unchanged

Total unfilled orders for the manufacturing sector were unchanged at $89.1 billion in November, as fewer unfilled orders in the transportation equipment and the fabricated metal products industries were offset by more unfilled orders in the primary metal manufacturing and machinery manufacturing industries.

New orders rose for a third consecutive month, up 0.5% to $51.8 billion. The primary metal manufacturing, machinery manufacturing and chemical product manufacturing industries contributed the most to the increase in new orders at the national level.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell