Canadian manufacturing sales fell 3.3% in August to $52.1 billion, Statistics Canada reported, the first decline in 2014. The decrease mostly reversed the gains recorded in June and July. The decline was broad-based, with 16 of 21 industries representing 81% of Canadian manufacturing registering lower sales figures.
“In year-ago terms, manufacturing sales grew 6.1% in August and volumes 3.3%, easing off of July's red-hot 8.5% and 5.9% year-ago growth rates. Inventories also fell in August, suggesting some fairly aggressive destocking of inventories in the month,” noted Bill Adams, senior international economist with PNC Financial Services.
Lower sales of motor vehicles and motor vehicle parts accounted for half the decrease. Sales of motor vehicles fell 12.0% to $8.9 billion. Apart from motor vehicles, sales declined 1.9%. Constant dollar sales decreased 3.7%, indicating that a lower volume of products was sold.
Sales were down in seven provinces in August, Statistics Canada reported, with the bulk of the decrease concentrated in Ontario. Manufacturing sales in Ontario declined 4.6% to $23.9 billion.
New orders for manufacturers were down 3.8% to $52.0 billion in August. The government said about half of the decline was attributable to the transportation equipment industry. New orders were also off in the petroleum and coal product, primary metal, machinery, and the computer and electronic product industries.
“August's drop in manufacturing sales is a large downward correction, but it comes after an even larger surge in manufacturing sales in recent months,” PNC’s Adams pointed out. “Through this volatility, Canadian manufacturers are having an excellent year. The RBC manufacturing PMI in September showed that this solid growth is probably continuing, as is job creation in the manufacturing sector.”