By Canadian factory sales showed a positive trend for the third consecutive month in September, driven by an increase in prices for refined petroleum products. According to Statistics Canada, manufacturing shipments reached a seasonally adjusted 72.79 billion Canadian dollars ($53.16 billion), marking a 0.4% increase compared to the previous month. This result was stronger than previously estimated, as the data agency initially expected a decline of 0.1% for the month.
The rise in sales was largely attributed to the strong performance of the petroleum and coal segment. However, when excluding this sector, manufacturing sales actually fell by 0.4%. On a quarterly basis, September’s growth played a crucial role in boosting sales by 1.3% for the third quarter, primarily driven by higher sales of petroleum and coal as well as food products. This positive performance follows a 1.6% drop in manufacturing sales during Q2 of this year.
The increase in sales for September was mainly a result of higher prices. After adjusting for price changes, manufacturing sales declined by 0.6% to reach 55.86 billion Canadian dollars. This indicates that there was a lower volume of goods sold during the month, which is consistent with the headwinds faced by the industry-level gross domestic product.
Sales of petroleum and coal products stood out with a significant rise of 6.3% in September, reaching a value of 9.14 billion Canadian dollars. This was the highest level recorded since January and can be attributed to the announcement made by Saudi Arabia and Russia, extending their voluntary oil production cut until the end of the year.
Looking at the bigger picture, petroleum and coal sales experienced an overall increase of 8.5% for the quarter, following declines in the previous two quarters.
In conclusion, Canadian factory sales demonstrated strength in September, benefiting from higher prices particularly in the petroleum and coal sector. Despite a decline in sales volume, the overall performance for the third quarter was positive, contributing to the recovery of the manufacturing industry.
Wood Product Sales Increase for Fourth Consecutive Month
Wood product sales in Canada saw a steady increase of 2.9% for the month, marking a fourth consecutive monthly gain. However, the chemical industry experienced a decline of 1.8% due to maintenance shutdowns at major petrochemical and resin plants in Alberta and Ontario.
Positive Trend in Motor Vehicle Sales
Motor vehicle sales showed a positive trend with a 0.7% increase compared to the previous month. However, sales of vehicle parts dropped by 2.6%. Overall, excluding motor vehicles, parts, and accessories, manufacturing sales rose by 0.5% in September.
Inventory Levels Rise Across Sectors
Factories reported a 1.5% increase in inventory levels during September. This widespread gain was led by the petroleum and coal segment, as well as the primary metal, beverage, and tobacco sectors.
Unfilled Orders and New Orders Decrease
Unfilled orders, which contribute to future sales if not canceled, decreased by 1.2% in the latest month. Additionally, new orders were 1.7% lower than the previous period.
Economic Slowdown Continues
Canada’s economic activity has faced a slowdown in recent months, partially due to higher interest rates. Early data suggests little change in industry-level gross domestic product for September, following months of stagnant output in July and August. The Bank of Canada projects continued weak economic growth for the next year.
Manufacturing Sector in Contraction
The country’s manufacturing sector remained in a contraction phase for the sixth consecutive month in October. S&P Global’s monthly purchasing managers index scored 48.6 for the month, reflecting a decline in output and orders. Moreover, companies continued to reduce purchasing and stock levels.
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