The Canadian manufacturing sector displayed a mixed but largely resilient performance in February 2024, according to the latest data released by Statistics Canada. While the overall sales increased by 0.7% to $71.6 billion, several subsectors showed significant growth, signaling robustness in specific areas of the industry.
The petroleum and coal products subsector emerged as a significant contributor to the overall growth, with sales increasing by 4.3% to $8.7 billion. This growth was driven primarily by higher prices, particularly for refined petroleum energy products, which saw a 5.9% increase. While the volumes also saw a modest rise of 0.8%, it’s noteworthy that despite the monthly uptick, sales in this subsector declined by 1.5% year-over-year.
Another standout performer was the electrical equipment, appliance, and component subsector, which reached its highest-ever sales figure of $1.5 billion—a remarkable 12.6% increase from January. This surge was fueled by both price and volume increases, with prices rising by 0.5% and exports of electronic and electrical equipment and parts also showing a 0.5% uptick.
In contrast, the chemical subsector faced challenges, recording a decline of 5.5% in sales to $5.3 billion. This decline was primarily driven by lower sales of pesticides, fertilizers, and other agricultural chemicals. Additionally, prices for fertilizers, pesticides, and other chemical products decreased by 0.6%, marking the fourth consecutive monthly decline.
Quebec led the provincial growth with a 3.0% increase in manufacturing sales, reaching $18.0 billion. This growth was driven by higher sales in electrical equipment, appliances, and components, which surged by 26.3%, as well as aerospace products and parts, which increased by 5.9%. However, this growth was partially offset by lower sales of machinery, which declined by 4.1%.
Alberta followed with a 4.1% increase in manufacturing sales, reaching $8.8 billion. The major contributors to this growth were the petroleum and coal (+9.5%) and chemical (+7.7%) subsectors. Meanwhile, Saskatchewan experienced a sharp decline of 12.8%, falling to $1.9 billion in sales. The decline was mainly attributed to lower sales of chemical products and machinery.
Total inventories decreased for the third consecutive month, dropping by 0.7% to $120.6 billion in February. Lower goods in process (-1.8%) and raw materials (-0.5%) inventories largely contributed to this decline. From an industry perspective, the chemical (-5.5%) and petroleum and coal products (-2.7%) subsectors were mainly responsible for the inventory decrease.
The inventory-to-sales ratio contracted from 1.71 in January to 1.68 in February. This ratio measures the time, in months, required to exhaust inventories if sales were to remain at their current level, suggesting improved inventory management efficiency.
The total value of unfilled orders rose by 0.8% to $105.1 billion in February, largely driven by a 1.2% increase in unfilled orders of aerospace products and parts. Additionally, the capacity utilization rate for the total manufacturing sector increased from 77.0% in January to 78.1% in February, indicating increased operational efficiency.