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Manufacturing Sales Report – July 2015

Manufacturing sales were up for the third month in a row in July, led by a surge in shipments of motor vehicles and parts. Overall sales were 1.7 per cent higher than in June, reaching a total of $52.2 billion – the highest monthly sales total so far this year.


Adding to the good news, sales data for May and June have been revised upward, suggesting that manufacturing activity in Canada over the last few months has been stronger than initially believed. May’s 0.2 per cent growth was revised to 0.7 per cent, and June’s 1.2 per cent increase now stands at 1.5 per cent.  On top of that, underlying demand for manufactured goods appears to be improving. New, non-aerospace manufacturing orders were up 1.4 per cent in July – the second consecutive monthly increase.  

               

The rebound in manufacturing activity is starting to eat away at the losses experienced from last July through to about February. Over that period, total sales fell 7.8 per cent, largely driven down by the lower value of refined petroleum products. Since February, sales are up 5.5 per cent and about two thirds of those losses have been recaptured.


Even so, because of a rapid increase early last year and the subsequent decline, year-over-year manufacturing sales remain below 2014 levels. Through seven months, total sales are 1.4 per cent below 2014 levels. The good news, however, is that the current momentum in manufacturing should improve that number in the coming months.


July’s manufacturing gains were heavily concentrated in motor vehicles and parts, which surged ahead by a remarkable 7.1 per cent for the month to reach $8.2 billion – the highest monthly sales total since April 2007. The auto sector accounted for nearly 63 per cent of all manufacturing growth nation-wide in July.


After a few relatively weak months, food processing businesses also saw a turnaround in July as sales were up 2.3 per cent. Similarly, fabricated metals manufacturers enjoyed a modest reprieve from their recent sharp losses, posting a 3.1 per cent increase. Even so, fabricated metals output remains well below last year’s levels, owing in large part to the impact of reduced capital spending in the energy sector. Plastics, aerospace and furniture producers also made gains in July.


Offsetting that growth to some degree were sharp declines in primary metals and non-metallic minerals production, both of which fell by 3.0 per cent in July. Machinery sales were also lower, as were shipments of computer and electronic products – a sector which had been making considerable gains since last summer.  

At the provincial level, Canada’s manufacturing sales growth was almost entirely concentrated in Ontario – unsurprising given the concentration of auto manufacturing in that province. Provincial sales were more than $1.0 billion higher than in June – a month-over-month increase of 4.4 per cent. At $24.9 billion, July’s sales were the strongest Ontario has seen in 12 months.

Sales growth was even stronger in Manitoba and Nova Scotia, which saw increases of 6.2 per cent and 5.2 per cent, respectively. However, since the manufacturing sector is relatively small in those provinces compared to Ontario, the impact on the national total was relatively small.

At the other end of the spectrum, sales in Quebec fell by 1.8 per cent as an increase in food processing was not enough to offset declines in aerospace and primary metals production. Sales in Alberta were also down (by 1.6 per cent), with losses spread across a range of sectors.


 

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MEQ est une division de Manufacturiers et exportateurs du Canada (MEC), la plus importante association commerciale et industrielle au pays fondée en 1871.

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