Manufacturing sales fell 2.0% to $70.4 billion in August, the fourth consecutive monthly decline. Sales in constant dollars decreased 1.7% in August, indicating lower volume of goods sold. Month over month, the Industrial Product Price Index declined 1.2% in August. Sales decreased in the paper (-5.7%) and wood product (-4.3%) industries in August.

Quebec Posts the Largest Decline

Manufacturing sales declined in seven provinces in August, led by Quebec and followed by Alberta and New Brunswick. Meanwhile, sales in Manitoba increased the most.

In Quebec, manufacturing sales were down 5.5% to $16.7 billion in August, the second consecutive monthly decrease. Lower sales of primary metals (-7.8%), fabricated metal products (-12.1%) and wood products (-10.1%) were the main contributors to the decline. On a year-over-year basis, total sales were up 6.7% in August.

In Alberta, sales declined 3.1% to $8.8 billion in August, mainly on lower sales of the petroleum and coal products (-6.5%) and chemical (-5.9%) industries. The decrease was partly offset by higher sales in the food industry (+5.7%). Despite the decline, total sales were up 23.3% in August compared with the same month a year earlier.

Sales in New Brunswick decreased 5.7% to $2.3 billion in August, mainly on lower sales of non-durable goods (-5.9%). On a year-over-year basis, total sales in New Brunswick rose 33.3% in August.

Following a 6.2% decline in July, sales in Manitoba increased 1.8% to $2.1 billion in August, mostly attributable to higher sales in the chemical (+14.5%) and machinery (+5.2%) industries.

Record-High Inventory Levels Continue

Total inventory levels increased 1.3% to $119.9 billion in August, on higher inventories in 16 of 21 industries, led by the aerospace product and parts (+5.0%), computer and electronic product (+7.0%) and beverage and tobacco (+6.8%) industries. The gains were partly offset by a 2.5% decline in inventories of petroleum and coal and a 3.5% decrease in paper products. Total inventories (+37.5%) and raw materials (+51.5%) rose compared with the level in February 2020, prior to the COVID-19 pandemic—mainly on higher prices of materials as the increases were 9.6% for total inventories and 13.7% for raw materials in real terms during the same period.

The inventory-to-sales ratio increased from 1.65 in July to 1.70 in August. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Unfilled Orders Rise

After a 0.2% decline in July, the total value of unfilled orders rose 1.5% to $107.5 billion in August on higher unfilled orders in the transportation equipment industry (+2.8%). The increase was partially offset by declines of unfilled orders in the fabricated metal industry (-3.7%). Total unfilled orders were up 20.8% on a year-over-year basis in August. The total value of new orders increased 0.6% to $72.0 billion in August, largely on higher new orders in the transportation equipment industry (+9.8%). 

Capacity Utilization Rate Edges Up

The capacity utilization rate (not seasonally adjusted) for the manufacturing sector edged up (+0.4 percentage points), from 76.6% in July to 77.0% in August.

Annual Survey of Manufacturing Advance Estimate for 2021

Some 2021 advanced estimates from the Annual Survey of Manufacturing Industries are now available and indicate that manufacturing activity increased 15.9% from 2020. Total revenue is estimated at $785.2 billion, revenue from goods manufactured is estimated at $734.3 billion and total expenses are estimated at $697.5 billion. Note that these advance preliminary estimates will be revised with the upcoming official release of the Annual Survey of Manufacturing Industries. 

Source: Statistics Canada