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Manufacturing Sales Analysis – December 2015

Manufacturers ended 2015 on a high note, buoyed by the end of a maintenance shutdown at New Brunswick’s Irving oil refinery and by strong sales of motor vehicles and parts out of Ontario. Building on an identical increase the previous month, overall manufacturing sales rose by 1.2 per cent in December to reach $51.6 billion. In spite of the increase, however, total sales remain about 1.6 per cent below their levels from 12 months earlier.

mfg sales dec 15 chart image

Forward-looking indicators for December were mixed. On the one hand, new orders for non-aerospace manufactured goods rose by 1.7 per cent to reach their highest level since August (aerospace orders are often excluded from analysis of new and unfilled orders because they tend to be extremely large and volatile, and take a long time to fill). However, unfilled orders continued to decline, falling by 1.2 per cent in December. All told, the value of unfilled (non-aerospace) orders in manufacturing in December is 9.3 per cent lower than it was in January. This decline has been spread across a wide range of manufacturing industries and could signal softer sales growth in the coming months.

unfilled mfg orders dec 15

December’s increase in manufacturing sales was spread across most broad industry categories, but largely driven by growth in three specific areas. First, automobile and parts producers once again enjoyed solid growth, with sales up 2.8 per cent compared to November. Shipments of wood products also spiked upward to end the year, with a 5.5 per cent increase in just one month. Finally, sales was up in a number of Canada’s smaller industries – notably shipbuilding, furniture, and electrical equipment and components. 

mfg sales month chart image dec 15

Seven provinces showed positive growth in manufacturing sales in December, but the gains were concentrated in three: Quebec, New Brunswick and Ontario. As alluded to above, the resumption of operations at Irving’s Saint John refinery helped lift overall manufacturing sales in that province by close to 17 per cent ($191 million). However, even with that increase, monthly sales in New Brunswick remain well below levels seen earlier in the year. For its part, stronger sales of wood products and primary metals helped raise Quebec’s manufacturing output by 1.7 per cent ($205 million) in December. Meanwhile, Ontario grew by a comparatively modest 0.7 per cent ($185 million) as gains in motor vehicles and machinery were partly offset by a sharp drop in sales of primary metals.

prov mfg sales dec 15

Once again, Alberta found itself at the bottom of the list as the province’s manufacturers struggle with little demand and rapidly-emptying order books. Provincial sales in December were down for the sixth month in a row, falling by 2.4 per cent compared to the previous month. Shipments from Alberta manufacturers have fallen by nearly 11 per cent since June.

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