Manufacturing sales across Canada slumped for the second consecutive month in May, as companies continue to face numerous supply chain disruptions.
According to Statistics Canada, manufacturing sales were down 0.6% to $57.9 billion in May, as a number of key sectors reported significant declines. In constant dollar terms, sales were down 2.5% to $48.2 billion, suggesting that a lower volume of goods were sold, as manufacturers continue to face supply chain disruptions.
Following a record-high sales level in April, machinery sales were down 16.9% to $3.1 billion, largely due to a slump in agricultural, construction, and mining machinery sales. A number of machinery manufacturers revealed to Statistics Canada that the lack of input materials — such as microchips as well as a delay in shipments — were largely responsible for the production slowdown. However, despite the setbacks, year-over-year sales in this category are still 25.7% higher.
Conversely, Canada’s wood production industry reported yet another record-breaking month, as sales jumped 6.1% to $5.4 billion in May. Elevated lumber prices were predominantly responsible for the gain though, as sales in constant dollars were actually 4.7% lower. Similarly, primary metal sales rose 3.6% to a record-high of $4.9 billion, also due to higher prices.
Total inventories increased 0.7% in May to $90.3 billion, amid higher inventories of chemical, petroleum, and wood products. This caused the inventory-to-sales ratio to jump to 1.56 in May, up from 1.54 in April.
Information for this briefing was found via Statistics Canada. The 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.