Following a significant increase observed at the beginning of the year, Canadian manufacturing sales dropped by 1.6% to $55.4 billion in February, amid lower sales of transportation equipment. However, the declines were moderately offset by sales increases in the petroleum and coal product, chemical, and wood product industries.
Motor vehicle sales in Canada fell by 14.5% to a total of $3.3 billion in February, following a decline of 9.1% in the month prior. This is the lowest level since May 2020, and is largely the result of the ongoing global semiconductor chip crisis that has plagued numerous automakers around the world. The reduced pace of vehicle manufacturing also affected the sale of plastics and rubber products, which fell 8.7% to $2.7 billion in February.
Meanwhile, sales in the petroleum and coal product industry grew by 6.5% to $4.7 billion, marking the fifth straight month of increases and the highest level since February of last year. However, as Statistics Canada notes, the industry’s gains were entirely the result of higher prices, as sales volumes actually declined by 3.3%. The production of petroleum significantly decreased in the US during February’s abnormally cold temperatures, and when combined with higher global demand, lead to the price increase.
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Chemical sales also increased in February, rising by 3.8% to $4.7 billion to the highest level since November 2018. Wood product sales also noted a considerable increase for the third consecutive month, rising by 4% to $4.3 billion amid higher volumes and prices. Lumber and other wood product prices jumped by 5.2%, while goods volume rose by 0.2%.
Total inventories increased 0.8% in February, reaching a total of $88.7 billion— the highest since May 2019. Higher inventory levels were primarily attributed to increased inventories of beverages and tobacco products, primary metals, and petroleum and coal products. However, inventory levels declined in the aerospace product and parts, furniture and related products, and plastics and rubber products industries. In the meantime, the inventory-to-sales ratio, which measures the number of months it would take to exhaust all inventories, inched from 1.56 in January to 1.6 in February.
Information for this briefing was found via Statistics Canada. Thee author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
