Manufacturing sales increased 1.4% to $57.1 billion in May, following a 1.1% decline in April.
Sales rose in 14 of 21 industries, representing 64% of total manufacturing sales. The chemical, machinery, and wood product industries accounted for most of the gains in May. The transportation equipment industry posted the largest decline.
In constant dollars, manufacturing sales were up 0.9%.
Higher sales of chemical and machinery products drive manufacturing growth
Sales in the chemical industry were up for the second consecutive month, rising 6.2% to $4.7 billion in May on higher volumes of products sold. There were widespread gains in most chemical sub-industries, particularly in the pesticide, fertilizer and other agricultural chemical manufacturing industry.
Machinery sales rose 8.9% to $3.3 billion, following three consecutive monthly declines. Higher sales of other general-purpose machinery as well as commercial and service machinery led the gains.
Sales in the transportation equipment industry declined 1.9% to $10.6 billion, following a 2.4% decrease in April. The declines in May were primarily due to lower sales of motor vehicles and motor vehicles parts. In particular, motor vehicle sales were down 6.6%, while sales of motor vehicles parts decreased 3.7%. Higher production of aerospace products and parts (+7.4%) partially offset the overall sales decline in transportation equipment.
The petroleum and coal product industry declined for the fourth consecutive month, with sales down 1.8% to $5.2 billion in May. Despite higher prices for energy and petroleum products, extended shutdowns at several refineries for maintenance and retooling work in Eastern Canada led to the decline. Volumes of products sold were down 4.7% as a result of the shutdowns.
Sales increase in seven provinces
Manufacturing sales were up in seven provinces in May, led by Alberta and British Columbia.
Sales in Alberta rose 7.9% to $6.3 billion, with increases in 15 of 21 industries. Sales of petroleum and coal products (+25.2%) led the gains, following multiple shutdowns at refineries for maintenance work in April. Excluding the petroleum and coal products industry, sales in Alberta rose 3.7%.
Manufacturing sales in British Columbia were up for the third consecutive month, rising 3.2% in May. Wood product manufacturing (+9.2%) was the main contributor to the gain.
Sales in Quebec rose 1.0% to $13.5 billion, following a 3.3% decline in April. The increase reflected gains in the aerospace product and parts industry (+14.2%). Sales were also up in the machinery and paper industries. Lower sales in the petroleum and coal products industry offset some of the gains.
In Manitoba, sales rose 7.5% to $1.8 billion. The gain reflected higher sales in 11 of 21 industries.
Newfoundland and Labrador (-29.7%) posted the largest decline in May on lower sales of non-durable goods.
Higher inventory levels
Manufacturing inventories rose 0.4% to a record high $81.5 billion in May. Inventories were up in 9 of 21 industries, representing 58% of total manufacturing inventories. The increase was driven by the machinery industry (+4.1%) followed by transportation equipment (+1.7%). The gains were moderated by a 5.3% decline in petroleum and coal products.
The inventory-to-sales ratio decreased from 1.44 in April to 1.43 in May. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders increase
Unfilled orders were up 3.5% to $92.8 billion in May, the fourth consecutive monthly gain. Higher levels of unfilled orders in the aerospace product and parts industry were mainly responsible for the overall rise in unfilled orders in May.
New orders were also up in May, increasing 4.9% to $60.2 billion. The gain was largely due to the aerospace product and parts industry. The overall increase was partially offset by a 13.3% decline in new orders for fabricated metal products.
Capacity utilization rates
The unadjusted manufacturing capacity utilization rate increased from 80.6% in April to 81.9% in May. In the machinery industry, the capacity utilization rate rose from 70.3% to 75.9%. This gain was consistent with higher production and sales in the industry. The rate also rose substantially in the fabricated metal products industry.
The petroleum and coal product industry reported a large decline in capacity utilization. The unadjusted rate decreased from 73.5% to 64.9% in May, reflecting the extended shutdowns at several refineries.
