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Petroleum refining drags down manufacturing sales in January

Published by Brad Fougere on March 17, 2015

Manufacturing sales report

After a strong end to 2014 – one which pushed annual sales to a new all-time high in 2014 – manufacturing shipments fell sharply to begin the year. Overall, Canadian manufacturing sales fell by 1.7 per cent in January compared to December. However, January’s sales numbers are 2.9 per cent higher than the same month last year.

Most of January’s decrease was the result of significantly lower petroleum and coal refining sales, which fell by 11.9 per cent in just one month. Excluding that one sub-sector, the picture for manufacturing is far healthier – a monthly decrease in total sales of just 0.5 per cent.

In fact, petroleum refining has been an anchor around overall manufacturing sales numbers for the past six months, when oil prices first began to fall. Since July of last year, overall manufacturing sales have fallen by 4.2 per cent. But when we subtract out the 34.1 per cent drop in refinery sales over that period, all other manufacturing has actually increased by 0.7 per cent.

Although petroleum and coal refining accounted for the lion’s share of the overall drop in sales in January, there was weakness across a range of sub-sectors. Machinery (-8.9 per cent), chemicals (-4.5 per cent), primary metals (-4.3 per cent) and motor vehicles (-2.3 per cent) were all down noticeably in January. Overall, eight of the eleven most important manufacturing sub-sectors in Canada recorded lower sales in January.

These losses were offset to a large degree by a tremendous surge in sales of aerospace vehicles and parts. Aerospace shipments, which can be volatile depending on the timing of specific deliveries, jumped more than 21 per cent in January (nearly $400 million) to reach an all-time monthly high of $2.2 billion. The previous record of $1.9 billion was set in September of last year.

At the provincial level, the decrease was felt all across Canada, with eight of ten provinces recording lower sales in January.  On a dollar-value basis, Ontario fared the worst, with a one-month drop in sales estimated at $557 million. Alberta came next at $482 million. However on a percentage basis, Alberta was the hardest-hit province, with sales falling 7.6 per cent over December levels. There were also sharp drops in Manitoba, New Brunswick and PEI.

Only Saskatchewan and Quebec saw positive growth in January, with gains of 4.8 per cent and 3.2 per cent, respectively. In Saskatchewan the gains were driven by higher sales of potash and other chemical products, while in Quebec it was aerospace deliveries.

Found in: StatsCan

National Office

Alberta British Columbia
Manitoba New Brunswick
Newfoundland & Labrador Nova Scotia
Ontario Québec
Prince Edward Island Saskatchewan