Canadian manufacturing sales up 10.7 percent in May

Canadian manufacturing sales up 10.7 percent in May

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According to Statistics Canada, manufacturing sales increased 10.7 percent to $40.2 billion in May following a record 27.9 percent decline in April, as many manufacturers resumed operations following full or partial shutdowns related to COVID-19 during the previous month. Nevertheless, total manufacturing sales in May were 28.4 percent below their pre-pandemic level in February.

Sales were up in 18 of 21 industries, led by motor vehicle, motor vehicle parts and petroleum and coal products industries.

In volumes terms, manufacturing sales rose 8.8 percent, indicating a higher volume of products sold in May.

Inventory levels declined for the second consecutive month, falling 1.5 percent to $86.3 billion in May. Inventories were down in 13 of 21 industries, led by the transportation equipment (-3.4 percent), fabricated metal product (-4.9 percent), machinery (-3.2 percent) and primary metal (-3.1 percent) industries. These decreases were partly offset by a 3.5 percent increase in wood product inventories.

The inventory-to-sales ratio declined from 2.41 in April to 2.15 in May. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Total unfilled orders for the manufacturing sector declined for the second consecutive month, down 2.4 percent to $95.4 billion in May. The decrease mainly reflected lower unfilled orders in the aerospace product and parts industry (-3.2 percent). This was partially offset by higher unfilled orders in the miscellaneous and motor vehicle industries.

After dropping by 31.7 percent in April, new orders rose 9.4 percent to $37.8 billion in May, mostly on higher orders of transportation equipment.

The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increased 8.8 percentage points, from 54.0 percent in April to 62.8 percent in May.

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