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Canada. Manufacturing sales up

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Manufacturing sales increased 1.7% in October to $45.5 billion. The increase largely reflects gains in the petroleum and coal products, primary metals and motor vehicle industries.

Manufacturing sales have been trending upwards at a slower rate in recent months after increasing substantially between May 2009 and May 2010.

Constant dollar manufacturing sales increased 1.1% in October.

Higher sales were seen in 14 of 21 industries, representing 80.0% of total sales.

Rising sales led by petroleum and coal products, primary metals and motor vehicles

Sales in the petroleum and coal products industry rose 4.3% to $6.0 billion in October. The increase reflects a 4.4% rise in prices, as indicated by the Industrial Product Price Index.

In the primary metals industry, sales increased 5.8% to $3.8 billion. The rise reflects both higher volumes and prices.

Sales increased 3.7% in the motor vehicle industry and production in the aerospace product and parts industry was up 7.4%.

The computer and electronic product industry had the largest decline in October with sales decreasing 4.4%. A large number of manufacturers in the industry reported lower sales in October.

Sales increase in five provinces

In October, sales increased in Quebec, Ontario, Alberta, Newfoundland and Labrador and Saskatchewan.

Sales advanced 3.7% in Quebec to $11.1 billion. The increase largely reflects higher production in the transportation equipment industry (+31.4%) and increased sales in the primary metals industry (+10.4%). Declines in the furniture, food, chemical, and fabricated metal product industries partially offset the overall rise in sales in the province.

Production-based industries

For the aerospace industry and shipbuilding industries, the value of production is used instead of sales of goods manufactured. This value is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured.

Unfilled orders are a stock of orders that will contribute to future sales assuming that the orders are not cancelled.

New orders are those received whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month.

Sales increased 1.8% in Ontario to $21.3 billion. Higher sales in the primary metals (+5.9%), petroleum and coal products (+5.4%), and the transportation equipment (+1.3%) industries were partly offset by decreases in the computer and electronic products (-3.0%) and food (-1.4%) industries.

Sales in Alberta rose 1.9% to $5.2 billion, largely as a result of a 12.1% increase in the petroleum and coal products industry. Manufacturing sales in Saskatchewan gained 0.9% as a result of gains in non-durable goods industries.

A 10.8% increase in sales in Newfoundland and Labrador reflected an increase in the province's non-durable goods industries. The remaining Atlantic provinces posted declines, led by a 4.7% decrease in New Brunswick.

Manitoba experienced the largest decline in sales in dollar terms, falling 6.6% to $1.2 billion. Lower sales in the transportation equipment (-21.6%) and primary metal (-18.9%) industries largely contributed to the overall provincial decline.

Inventory levels increase

Inventory levels increased 0.3% in October to $60.4 billion. Inventory levels have been relatively stable in 2010 following declines for most of 2009.

The rise in October reflected a 3.5% gain in the primary metals industry and a 4.7% advance in the petroleum and coal product industry. In the primary metals industry, higher levels of goods-in-process and finished product inventories were largely responsible for the overall increase. For petroleum and coal products, an increase in the value of raw materials inventories held at refineries was behind the rise in the industry.

These increases were partially offset by declines of 2.9% in the machinery industry and 2.3% in aerospace product and parts inventories.

The inventory-to-sales ratio decreased from 1.35 in September to 1.33 in October. The ratio has remained stable since the spring of 2010.

Unfilled orders decline

Unfilled orders declined 1.4% to $52.5 billion in October, the lowest level since April 2010. Unfilled orders have levelled off in 2010 after declining throughout most of 2009.

The decrease was mostly concentrated in the aerospace product and parts industry, where the backlog of orders declined 5.7% to $21.4 billion.

Excluding the aerospace product and parts industry, unfilled orders rose 1.8% in October compared with September. The increase reflects gains in the fabricated metal product (+3.8%) and machinery (+1.9%) industries.

New orders rose 3.0% to $44.8 billion, with the primary metal, transportation equipment, machinery and petroleum and coal product industries leading the way.

© Statistics Canada -

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