Monthly Survey of Manufacturing, December 2023

Released: 2024-02-15

Following a 1.5% increase in November, manufacturing sales fell 0.7% to $71.2 billion in December, mainly attributable to the motor vehicle industry group (-13.5%) as well as the chemical product subsector (-3.1%). Production of aerospace products and parts marked the largest increase, rising 10.6% to $2.5 billion in December.

Total sales in constant dollars edged down 0.1% in December, while the Industrial Product Price Index fell 1.5% in December.

On a quarterly basis, sales declined 1.6% to $213.6 billion in the fourth quarter of 2023, following a 1.3% increase in the third quarter. The transportation equipment (-5.3%) and food (-1.3%) subsectors contributed the most to the decrease.

Chart 1 
Manufacturing sales

Motor vehicle manufacturing leads monthly decline

Sales of motor vehicles fell 13.5% to $4.4 billion in December, the fifth consecutive monthly decline and the lowest level since December 2022. Production slowdowns for retooling in some auto assembly plants in Ontario were largely responsible for the decline. Exports of motor vehicles and parts fell 7.4% in December 2023. On a quarterly basis, sales of motor vehicles declined 12.9% in the fourth quarter of 2023, following four consecutive quarterly increases.

Following a 6.6% increase in November, sales of chemical products fell 3.1% to $5.4 billion in December, primarily driven by lower sales of pharmaceutical and medicine products (-19.7%).

Production of aerospace products and parts rose 10.6% to $2.5 billion in December, the highest level on record. On a quarterly basis, production increased 14.6% in the fourth quarter, also the largest quarterly sales value on record. Strong aircraft deliveries by some major aerospace manufacturers contributed to the gain. Exports of aircraft, aircraft engines and aircraft parts were up 13.8% in December.

Sales decline in four provinces, led by Ontario and Manitoba

In December, four provinces posted lower sales, led by Ontario and Manitoba. Quebec posted the largest increase.

Sales in Ontario declined 2.8% to $31.0 billion in December, mainly on lower sales of motor vehicles (-13.7%). Sales on a quarterly basis fell 4.7% in the fourth quarter.

Sales in Manitoba declined 5.2% to $2.1 billion in December, the third consecutive monthly decline, mainly on lower sales in the transportation equipment (-19.9%) and machinery (-17.8%) subsectors.

In Quebec, sales rose 1.6% to $18.3 billion in December, on higher production of aerospace products and parts (+13.6%). On a yearly basis, total sales in Quebec increased 1.7% in December.

Total inventories decline

Total inventories fell 0.6% to $123.1 billion in December, on lower goods in process (-3.0%) and finished product (-0.9%) inventories. Inventories declined the most in the transportation equipment (-3.3%), petroleum and coal (-5.5%) and food (-3.1%) subsectors.

Chart 2 
Inventory levels decline

The inventory-to-sales ratio was unchanged at 1.73 in December. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Chart 3 
The inventory-to-sales ratio is unchanged

Capacity utilization rate declines

The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector decreased from 79.1% in November to 75.3% in December. The declines were more noticeable in the transportation equipment (-7.0 percentage points) and food (-5.3 percentage points) subsectors. The capacity utilization rate of petroleum and coal manufacturing increased 6.7 percentage points in December.

Chart 4 
The capacity utilization rate declines

Manufacturing: Year in review, 2023

Canadian manufacturing sales and inventories posted moderate increases in 2023 compared with 2021 and 2022. The deceleration in growth was partially influenced by various factors including international political tensions, extreme weather conditions causing wildfires and drought, and labour strikes. Despite the persistent supply chain issues in 2023, the average industrial product prices decreased 1.8% from 2022 to 2023, mainly driven by lower prices for energy and petroleum products (-14.5%). Meanwhile, certain industries, notably transportation, benefited from the global economy's gradual recovery.

In current dollars, total manufacturing sales increased 1.1% to $862.8 billion in 2023, following a 17.9% increase in 2021 and an 18.1% gain in 2022. Sales rose in 9 of 21 subsectors in 2023, led by the transportation equipment (+27.0%) and food (+5.9%) subsectors. In contrast, the petroleum and coal subsector (-14.3%) posted the largest decrease.

Following a 3.9% increase in 2021 and a 4.9% gain in 2022, total manufacturing sales in constant dollars rose 1.5% to $671.9 billion in 2023, mainly on higher sales of transportation equipment and machinery.

Year-end inventory levels increased 1.2% to $123.1 billion in current dollars in 2023. The gain stemmed from higher inventories of durable goods (+2.3%), while inventories of non-durable goods edged down 0.4%.

Transportation equipment drives up manufacturing sales

Sales in the transportation equipment subsector marked a new record, rising 27.0% to $139.1 billion in 2023. The gains were mainly attributable to the auto industry, followed by aerospace product and parts manufacturing.

The motor vehicle industry group was the primary contributor to the growth in transportation equipment, as its sales rose 37.1% from 2022 to $62.1 billion in 2023. Sales of motor vehicle parts increased 17.4% in the same period. While the easing of semiconductor supply chain shortages helped auto manufacturers ramp up production in 2023, the industry was temporarily impacted by a labour union strike in October. Exports of motor vehicles and parts rose 29.4% in 2023.

Production of aerospace products and parts increased 29.7% from 2022 to $24.9 billion in 2023, the second highest total on record. The growth was mainly driven by sustained demand for aircrafts and aircraft parts throughout the year. Exports of aircraft, aircraft engines and aircraft parts increased 24.2% in 2023.

Sales of food products marked a record high, rising 5.9% from 2022 to $150.0 billion in 2023. The gain was largely attributable to higher prices, as sales in volume terms increased by 0.6%. The increase in current dollars in 2023 was widespread across seven of nine industry groups, led by the meat product (+6.6%) and bakeries and tortilla (+11.5%) industry groups.

Although prices of some intermediate food products including grains declined in 2023, higher feed costs due to droughts in North America and the conflict in Ukraine contributed to higher prices of meat products. In bakery manufacturing, average prices of sugar and sugar mill by-products increased 24.7% in 2023.

Sales of petroleum and coal products post the largest decline

Sales of petroleum and coal products fell 14.3% to $101.6 billion in 2023, following two consecutive yearly increases. On a constant dollar basis, sales were up 2.5% as average prices of refined petroleum energy products (including liquid biofuels) fell 15.6% in 2023.

Inventories accumulate at slower pace

The year-end total inventory levels in current dollars continued to grow, rising 1.2% from 2022 to $123.1 billion in 2023, although at a slower pace compared with 2021 (+17.2%) and 2022 (+20.3%). Finished products (+3.9%) and goods in process (+1.7%) rose among the inventory components, while raw materials declined 1.0% in 2023. In constant dollars, all three components posted increases.

In the durable goods industries, total inventories rose 2.3% in current dollars and 2.1% in constant dollars in 2023. The increase in current dollar terms was primarily driven by higher inventories of primary metal (+7.9%) and transportation equipment (+5.2%).

In the non-durable industries, total inventories in current dollars declined 0.4% in 2023, mainly on lower prices. The largest contributor to the decline was the plastics and rubber subsector (-21.6%).

Sustainable development goals

On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 15 years. The plan is based on 17 specific sustainable development goals.

The Monthly Survey of Manufacturing is an example of how Statistics Canada supports the reporting on the global sustainable development goals. This release will be used to help measure the following goal:

Contact information

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