More signs of a recovery

Manufacturing sales continued to edge upwards in February – although transportation manufacturers were left out of the good news.

According to Statistics Canada’s monthly manufacturing report, manufacturers saw a 0.1 percent increase in sales in February – totaling $44.1 billion. This increase marks the eighth month sales have increased in the sector since reaching its most recent low in May 2009.

Constant dollar manufacturing sales increased 0.3 percent in February for the sixth consecutive month. Sales of non-durable goods (i.e. food, beverage, tobacco and textiles) rose 0.4 percent in February, compared with a 0.3 percent drop by durable good manufacturers (i.e. wood, primary metals, computers, etc).

Sales gains were reported in 12 of 21 industries, but these were largely offset by decreases in the remaining nine. Sales by plastic and rubber product manufacturers rose 4.4 percent during the month, following a 9 percent gain in January.

Chemical product manufacturers also reported strong gains, up 4.3 percent in February. Sales in this industry have increased for five consecutive months, reaching the highest level since October 2008. Much of the strength in February reflected sales gains by pharmaceutical and medical manufacturers, triggered in part by medical aid being sent to Haiti.

The petroleum and coal products industry (-3.9 percent) reported the largest decrease in February. Sales were pushed down by a combination of factors, including lower prices and the impact of fires at two refineries.

The transportation equipment industry declined for a second month, following sizeable gains during the latter half of 2009. Motor vehicle manufacturing sales decreased 1.1 percent in part reflecting temporary shutdowns. Motor vehicle parts sales decreased 3.4 percent compared with January, while aerospace production declined 0.4 percent.

Provincial results were evenly split in February, with most of the sales increases in Western Canada and Ontario. The Prairie provinces were a source of strength in February, gaining 3.3 percent. Alberta led the provincial gains, up 4.4 percent, reflecting strong increases in computers and electronics, petroleum and coal, and chemical product sales.

Sales in Ontario advanced for a third consecutive month (+0.7 percent), despite a 1.5 percent decrease in the transportation equipment industry. Tobacco and beverage manufacturing (+14.6 percent) and chemical products (+7.1 percent) were behind most of the gains.

The Atlantic provinces reported a 9.5 percent decrease in sales for February. Sales in Newfoundland and Labrador fell a substantial 33.8 percent, followed by a 7.1percent drop in New Brunswick and a 4.2 percent decline in Nova Scotia. Only Prince Edward Island managed a gain during the month, rising 1.3 percent.

Sales in Quebec declined 1.0 percent in February, reversing half of the gain reported in January. Decreases were widely based during the month, with key industries such as food, petroleum and coal, primary metals, and transportation all reporting declines.