Monthly Survey of Manufacturing, September 2012

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Manufacturing sales advanced 0.4% to $49.8 billion in September. The gain reflected higher production in the aerospace product and parts industry and increased sales of primary metals. Excluding the aerospace industry, total manufacturing sales decreased 0.7%. The increases were partly offset by a decline in the motor vehicle assembly industry.

Sales rose in 8 of 21 industries, representing just under half of Canadian manufacturing. Sales of durable goods increased 1.1% to $25.8 billion, while non-durable goods sales decreased 0.4% to $24.0 billion.

Constant dollar sales were up 0.4% in September, indicating a gain in the volume of manufactured goods sold.

Chart description: Manufacturing sales advance

CSV version of the chart

Gains led by the aerospace product and parts industry

In the aerospace product and parts industry, production increased 43.0% to $1.8 billion. The increase was the largest since May 2012, when production rose 66.8%. The aerospace industry is one of the more volatile industries in the manufacturing sector.

Sales in the primary metal industry increased 3.7% to $3.9 billion in September, partly reflecting higher prices.

In the motor vehicle assembly industry, sales declined 3.6% to $4.6 billion. The decrease offset a portion of the gain in total manufacturing sales. Notwithstanding the decline in September, sales in the industry have risen in 12 of the past 15 months. Sales in September 2012 were 18.2% higher than they were in September 2011.

Manufacturing at a glance: The motor vehicle assembly and motor vehicle parts industries

Since the start of the economic downturn in late 2008, manufacturing sales of motor vehicles and parts have gradually increased. January-to-September 2012 sales of motor vehicles were $40.4 billion, the highest since the same period in 2007 (data in this section are unadjusted for seasonality). Motor vehicle parts manufacturers also posted strong gains. January-to-September sales were $18.1 billion, again the highest level for the same period since 2007.

The motor vehicle industry has also shown modest gains relative to other industries in the manufacturing sector. Over the first nine months of 2012, the share of sales by motor vehicle manufacturers relative to total manufacturing was 9.1%, an increase from a low of 6.4% in 2009, but well below the most recent peak of 15.5% in 1999.

The share by motor vehicle parts manufacturing recovered as well. To date, parts manufacturing holds a 4.1% share of total manufacturing activity, up from a low of 3.5% in 2009. This industry's share most recently peaked at 6.0% in 1999.

Despite the recent recovery in the value of manufacturing sales to levels prior to the 2008 downturn, the motor vehicle and parts industries of 2012 remained well below the expansionary levels of the late 1990s. Over the past decade, the Canadian arm of the North American auto sector witnessed the closure of several assembly plants and auto-part factories, as the sector continued to restructure in an ever-competitive marketplace.

Sales rise in three provinces in September

Sales advanced in Quebec, Alberta and Manitoba in September.

In Quebec, sales rose 4.2% to $11.6 billion. The increase reflected a strong gain in the aerospace product and parts industry. Higher sales in the petroleum and coal product industry and the primary metal industry also contributed to the provincial advance.

Sales in Alberta increased 1.9% to $6.4 billion, largely as a result of gains in the petroleum and coal product industry. Lower sales in the machinery and food industries offset a portion of the increase.

Manufacturers in Manitoba reported a 3.7% advance to $1.3 billion, reflecting higher sales in the durable goods industries.

Sales declined 0.9% to $23.0 billion in Ontario. The decrease largely stemmed from lower sales in the motor vehicle assembly, fabricated metal product, motor vehicle parts, and primary metal industries. Production in the aerospace product and parts industry rose 20.1% in September, partially offsetting these declines.

In Newfoundland and Labrador, sales were down 18.1% to $493 million, reflecting declines in the non-durable goods industries.

Inventories edge upwards

Inventories edged up 0.2% to $65.2 billion in September, with the machinery and food industries leading the gains. Machinery inventories rose 2.1% to $7.1 billion, the highest value on record for the industry. Inventories of machinery have increased in seven of the past nine months. In the food industry, inventories increased 1.7% to $6.2 billion, reflecting widespread gains.

Lower inventories in the petroleum and coal product (-4.5%), the computer and electronic product (-3.1%), and the aerospace product and parts (-1.9%) industries offset most of the gains.

Chart description: Inventories edge upwards

CSV version of the chart

The inventory-to-sales ratio was unchanged at 1.31 in September. The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Chart description: The inventory-to-sales ratio is unchanged

CSV version of the chart

Unfilled orders decrease

Unfilled orders decreased 0.3% to $62.0 billion in September. A 0.7% decrease in the aerospace product and parts industry was partly responsible for the decline in total unfilled orders.

In the machinery industry, unfilled orders declined 2.3% to $7.7 billion, the fourth consecutive monthly decline. Unfilled orders reached an all-time peak in May 2012.

An 8.7% advance in the computer and electronic product industry offset a portion of the declines in unfilled orders.

Chart description: Unfilled orders decrease

CSV version of the chart

New orders advanced 2.2% to $49.6 billion. The gain largely stemmed from higher orders in the aerospace product and parts industry.