Plant closures push manufacturing sales down further

Plant closures in the motor vehicle and primary metal industries, along with continued volatility in the aerospace industry, pushed Canada’s monthly manufacturing sales in May to their lowest level since November 1998, falling six per cent to $38.4 billion, Statistics Canada said in their Monthly Survey of Manufacturing.

Manufacturing sales had levelled off between February and April, after falling by 18.7 per cent between October 2008 and January 2009. Constant dollar manufacturing sales fell 5.8 per cent in May, indicating that lower volumes rather than price changes were behind the decrease in sales.

Sales in 17 of 21 manufacturing industries decreased in May, accounting for about three-quarters of total sales.

The transportation equipment industry led the declines, falling 25.7 per cent compared with April. Excluding the transportation equipment industry, total Canadian manufacturing sales decreased 2.1 per cent. Motor vehicle manufacturing sales dropped 25.4 per cent on the back of several plant shutdowns. Motor vehicle parts manufacturing fell 22.2 per cent, reflecting a decrease in demand from vehicle assembly plants.

Production in the aerospace industry decreased by $781 million, reversing a similar sized increase in April. The aerospace products and parts industry has been extremely volatile over the past several months.

Primary metal manufacturers reported a 9.0-per-cent decrease in sales for May, a reflection of plant shutdowns, lower prices and weak market demand.

Miscellaneous manufacturers (–13.7%), machinery manufacturers (–6.0%), fabricated metal products (–3.5%), and food (–2.9%) were other industries with large sales decreases during May.

Weakness in Central Canada partially offset by the Atlantic provinces
Sales in Ontario decreased by 7.8 per cent in May, largely the result of steep declines in the manufacturing of motor vehicles (–26.1%) and motor vehicle parts (–23.1%). The primary metals industry (–15.3%) was also down, contributing to the overall fall in sales in the province. Sales in Quebec fell 9.1 per cent in May, after a 4.2-per-cent gain in April. A 55.1-per-cent drop in aerospace products and parts production was largely responsible for the decline.

Excluding Ontario and Quebec, manufacturing sales in Canada were relatively unchanged in May, edging down 0.2 per cent. The Atlantic provinces as a whole reported a 6.7-per-cent increase in sales in May. The rise in sales reflected higher volumes and prices in the petroleum and coal products industry.
www.statcan.gc.ca