CME: Canada’s Manufacturing Sales Post Biggest Decline Since April 2020

HIGHLIGHTS:

• Manufacturing sales declined 3.0% to $58.5 billion in September, the steepest fall since April 2020.
• The decrease spanned 6 of 11 major industries and was mainly driven by the motor vehicles and parts industry.
• Sales were down in 8 of 10 provinces, led by Ontario and Quebec.
• The inventory-to-sales ratio increased from 1.60 in August to 1.67 in September, the highest level since June 2020.
• Forward-looking indictors were mixed, with unfilled orders up 0.6% and new orders down 3.0%.
• The capacity utilization rate fell from 77.1% in August to 74.6% in September on lower production.
• The manufacturing sector’s recovery continues to be hindered by supply chain disruptions, especially in the auto sector. While business sentiment among manufacturers remains positive, most analysts expect these supply chain issues to persist well into 2022.

MANUFACTURING SALES POST BIGGEST DECLINE SINCE APRIL 2020

Manufacturing sales declined 3.0% to $58.5 billion in September, the steepest fall since April 2020. The picture was even more disappointing after stripping out price effects. In constant dollar terms, manufacturing sales tumbled 4.2%, indicating a lower volume of goods sold.