February Manufacturing Sales Slide

Following the largest increase observed in seven months in January (+3.4 per cent), manufacturing sales fell 1.6 per cent to $55.4 billion in February on lower sales of transportation equipment, says Statistics Canada. The declines were partially offset by higher sales in the petroleum and coal product, chemical, and wood product industries. Since January, motor vehicle and motor vehicle parts manufacturers have faced a semiconductor shortage, which has led to production slowdowns or shutdowns at several auto assembly plants. The tight supply of semiconductors also impacted plastics and rubber products manufacturing in February as a result of lower demand for plastic products from the auto industry. In constant dollars, manufacturing sales decreased four per cent, indicating that higher prices mitigated a significantly lower volume of goods sold in February. Wood product sales rose for the third consecutive month, up four per cent to $4.3 billion in February on higher prices and volumes. Prices for lumber and other wood products increased 5.2 per cent in February, while the volume of goods sold edged up 0.2 per cent. Manufacturing sales fell in four provinces in February, led by Ontario and New Brunswick. Quebec reported the largest sales increase. Total inventories rose 0.8 per cent to $88.7 billion in February, their highest level since May 2019, on higher inventories of beverages and tobacco products (+14.4 per cent), primary metals (+3.2 per cent), and petroleum and coal products (+4.8 per cent). The inventory-to-sales ratio increased from 1.56 in January to 1.6 in February. Following two consecutive monthly gains, unfilled orders decreased 1.1 per cent to $86.6 billion in February, on lower unfilled orders of transportation equipment (-1.9 per cent) and chemicals (-6.8 per cent). The total value of new orders fell 6.6 per cent to $54.4 billion in February, driven by lower unfilled orders of transportation equipment (-33 per cent).