By Robb M. Stewart
OTTAWA–Canadian factory sales increased in November, buoyed by a return to normal output by several chemical plants following shutdowns as well as a rebound in sales of primary metal products.
Manufacturing shipments rose 1.2% from the month before to a seasonally adjusted 71.69 billion Canadian dollars, the equivalent of about $53.46 billion, Statistics Canada said Monday.
The result was in line with the data agency’s advance estimate, and marks a partial rebound from the downwardly revised drop of 2.9% in October.
Manufacturing sales rose an even stronger 1.6% on a constant dollars basis to C$55.51 billion in November, an indication the rise was driven by a higher volume of goods and not prices as the industrial product price index was down 0.4% for the month.
The improvement in factory trade came despite a fall in motor vehicle sales, a second consecutive monthly decline with a continued shutdown at a major assembly plant in Ontario for retooling.
Excluding motor vehicles, parts and accessories, manufacturing sales increased 1.5% from the month before. Exports of vehicles and parts were up 1.4% in November.
Statistics Canada noted sales of chemical products jumped 6.6%, following three straight months of declines, though sales for the segment were 1.1% lower than a year earlier. Higher sales of non-ferrous metals, except aluminum, were lifted by an increase in prices and pushed sales of primary metal products to a first increase in four months.
Inventory levels held by factories continued to increase in November, rising 0.5% for the month to the highest level on record thanks to increases in transportation equipment, machinery and petroleum and coal.
Unfilled orders, the stock of orders that will contribute to future sales if they aren’t canceled, declined 0.8% for the month, helped by aerospace manufacturers filling backlog orders, the agency said. New orders were down 0.3% from the prior month.
The Bank of Canada has projected economic growth, which contracted on an annualized basis in the third quarter of 2023 thanks in part to a drop in international exports and slower inventory buildup by businesses, will remain subdued before picking up again late this year.
A downturn in Canadian manufacturing looks to have deepened in December, with faster falls in output and new orders and an indication jobs are being cut, S&P Global’s latest survey showed. Its manufacturing purchasing managers’ index fell to 45.4 last month, the lowest since May 2020 and an eighth straight month the index has been below the 50 threshold between expansion and contraction.
Write to Robb M. Stewart at [email protected]
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