Despite gains in key sectors, overall Canadian manufacturing sales remain lower year-over-year in July
In July, Canadian manufacturing sales rose by 1.4 percent to $71bn, recovering from a 1.7 percent decline in June.
Statistics Canada reported that petroleum and coal sales increased by 6.7 percent, while chemical sales grew by 5.3 percent. In contrast, the wood product subsector recorded the largest decline at 4.8 percent. Despite the monthly growth, overall sales were 1.1 percent lower than July 2023.
Sales in constant dollars increased by 0.9 percent in July. The Industrial Product Price Index remained unchanged, while the Raw Materials Price Index rose by 0.7 percent.
Sales of petroleum and coal products led the monthly increase. After rising by 0.4 percent in June, sales in this subsector grew by 6.7 percent to $8.6bn in July. The increase was driven by higher demand and prices for petroleum products, and sales in constant dollars increased by 4.5 percent.
Prices for refined petroleum energy products rose by 2.2 percent, following two months of decline. Year-over-year, total sales in this subsector increased by 13.1 percent.
Chemical product sales also experienced a rise, up 5.3 percent to $5.6bn in July, driven primarily by pharmaceutical and medicine products, which saw a 17.3 percent increase. Exports of these products increased by 4.6 percent.
A 6.3 percent decline in basic chemical sales, due in part to a major plant shutdown, offset some of the gains.
Wood product sales fell by 4.8 percent to $2.9bn, marking the lowest level since May 2023. The decline was attributed to lower demand and prices, with all wood product industry groups experiencing drops. Sawmills and wood preservation manufacturing led the decrease with an 11.6 percent decline.
Softwood lumber prices dropped by 7.8 percent, reaching their lowest level since June 2020.
Manufacturing sales increased in seven provinces, with Saskatchewan and Quebec showing the largest gains at 28.0 percent and 1.9 percent, respectively.
In contrast, Ontario saw a 0.6 percent decline. Saskatchewan’s increase was driven by a 55.0 percent rise in food sales, particularly in the grain and oilseed milling industry, following a steep decline in June.
Quebec’s growth came from higher sales of heavy-duty trucks and fabricated metal products, contributing to a 3.2 percent year-over-year increase.
Ontario’s decline was due to lower motor vehicle and food sales, affected by planned shutdowns at auto assembly plants.
Total inventory levels rose by 0.9 percent in July to $122.5bn, with increases in 11 of 21 subsectors. Higher inventories of goods in process (+2.9 percent) and finished products (+0.7 percent) were partially offset by a slight decrease in raw materials.
Transportation equipment and chemical products saw the largest inventory increases, with transportation equipment up 3.6 percent and chemical products up 4.4 percent. The inventory-to-sales ratio remained steady at 1.73.
Unfilled orders rose by 0.6 percent to $105.8bn, following a 0.9 percent decline in June. The increase was driven by higher unfilled orders for aerospace products and parts, while the computer and electronic product subsector saw the largest decline at 5.9 percent.
The capacity utilization rate for the manufacturing sector fell from 80.2 percent in June to 78.7 percent in July.
Declines were recorded in the transportation equipment, wood, and chemical product subsectors, while the petroleum and coal subsector saw a 2.9 percentage point increase, partially offsetting the overall decline.
