Canada: Monthly Survey of Manufacturing, April 2018

Manufacturing sales fell 1.3% to $56.2 billion in April, following two consecutive monthly increases.

Sales were down in 10 of 21 industries, representing 49.6% of the manufacturing sector. Sales in the petroleum and coal products and transportation equipment industries accounted for much of the decrease in April. Excluding these two industries, manufacturing sales rose 0.4%.

The petroleum and coal products and transportation equipment industries post the largest declines
In April, sales in the petroleum and coal products industry fell 10.9% to $5.2 billion, a third consecutive monthly decline. The decrease in April was entirely due to lower sales volumes, as prices for the industry rose 4.5%, according to the Industrial Product Price Index. Partial shutdowns at a number of Canadian refineries for maintenance work during the month were a major contributor to the decline in volumes sold (-13.2%).

Sales of transportation equipment fell 2.3% to $10.9 billion in April, largely due to weaker sales of other transportation equipment (-55.8%) and lower production of aerospace products and parts (-6.4%).

In April, sales were up in 11 industries, with the largest increases in the primary metal manufacturing (+3.8%) and food products (+1.9%) industries.

Sales down in six provinces

In April, sales were down in six provinces, led by Quebec and Alberta.

Following two months of increases, sales in Quebec fell 3.4% to $13.3 billion, mostly as a result of lower sales of petroleum and coal products. Decreases in the aerospace product and parts industry and the machinery industry also contributed to the provincial decline.

In Alberta, sales were down 5.3%, following a 0.5% increase in March. The decline was largely attributable to a 20.5% decrease in sales of petroleum and coal products, which resulted in part from partial shutdowns for maintenance work at some of the province’s refineries.

Saskatchewan posted the largest monthly increase in April, with sales rising 6.7% to $1.5 billion. This second consecutive monthly increase was driven by higher sales of non-durable goods.

Inventory levels rise

Inventory levels rose 2.2% in April to $81.2 billion, a seventh consecutive monthly increase. The largest inventory increase occurred in the petroleum and coal products industry (+6.6%). Inventory levels also rose in the transportation equipment (+2.2%), machinery (+3.7%) and food products (+2.9%) industries.

The inventory-to-sales ratio rose from 1.40 in March to 1.44 in April. 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 increase

In April, unfilled orders increased 1.3% to $90.0 billion, a third consecutive monthly increase. Most of the gain came from a 1.8% increase in the aerospace product and parts industry. Unfilled orders were also up in the fabricated metal products industry.

New orders fell 1.6% to $57.4 billion in April. This decline was mainly the result of lower new orders in the petroleum and coal products and in the aerospace product and parts industries.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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