Canadian Manufacturing

Manufacturing sales down in November

StatsCan report shows decline led by motor vehicles sector

OTTAWA‑Manufacturing sales declined 0.8 per cent in November to $44.9 billion, piloted by a decline in the motor vehicles and motor vehicle parts industries. Economists had expected an increase of 0.5 per cent.

Statistics Canada reports sales in transportation equipment and cars fell seven per cent in November. StatsCan is reporting that the decline may be due to shift reductions, retooling and primary metal sales being down. Ontario led the decline, falling 2.3 per cent. The agency is reporting Ontario’s decline offset gains in other provinces.

These numbers, however, come after an earlier set of more optimistic November numbers that reported the auto industry was gaining, led by an increase in truck production and sales.

TD Canada Trust economist Sonya Gulati says today’s numbers show that recent reports are contradicting.

“There really haven’t been any trends, making it increasingly hard to forecast numbers,” she says. “The numbers are all over the map. One month they’re up, the next month they’re down.”

The fall in motor vehicle manufacturing may also be the result of declining sales of primary metals, down 1.9 per cent. Inventories in that sector are reported to be up 2.4 per cent.

Gulati says that December’s transportation forecast is expected to be positive, despite StatsCan’s preliminary data that showed sales fell about five per cent.

Many manufacturers outside of the transportation and primary metal industries reported gains over October’s reports. Computer equipment led gains, up 5.1 per cent, while food manufacturing was up 0.7 per cent.

StatsCan reports that inventory levels are up 1.3 per cent to $61.1 billion, mainly due to larger deliveries of raw materials.

The number of unfilled orders was up 0.5 per cent to $52.7 billion, increasing for the first time in three months. The majority of unfilled orders were found in the fabricated (5.2 per cent) and primary (15.2 per cent) metal industries. Transportation orders, though, were down 0.7 per cent.

Gulati says TD’s manufacturing forecast for 2011 is promising as job numbers should continue to increase as the U.S economy picks up strength. Canada’s parity with the U.S dollar may also play a factor, as commodities continue to rise with the strength of the Canadian dollar.

The Canadian dollar was up $0.05 of a cent to US$1.77 US today despite higher commodity prices and Statistic Canada’s manufacturing report.

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