Canadian manufacturing sales experienced a slight uptick in May 2024, marking a 0.4% increase to reach $71.4 billion. This follows a more significant 1.4% rise in April. The growth was primarily driven by higher production in the aerospace product and parts industry, which saw an 11.2% increase, and notable gains in the food (1.4%) and paper (5.5%) product subsectors. However, the sales of motor vehicles and petroleum and coal products declined significantly, by 4.2% and 2.2% respectively. On a year-over-year basis, total sales fell by 1.8% in May.
In constant dollars, manufacturing sales mirrored the 0.4% increase. The Industrial Product Price Index remained unchanged, while the Raw Materials Price Index dropped by 1.0%.
The aerospace product and parts industry rebounded with a remarkable 11.2% increase in May, recovering from a 6.1% decline in April. This rise brought the sector to its highest production level on record at $2.7 billion. The demand surge in commercial and business aircraft markets post-pandemic, particularly in 2023, continued into 2024, contributing to a 23.9% year-over-year production increase.
Food product sales rose by 1.4% to $13.0 billion in May, achieving the third-highest level on record. This growth was widespread across the industry, with significant contributions from seafood (36.2%), meat (5.7%), and bakery and tortilla (8.9%) manufacturing. Seasonal demand was a key factor, as sales of food in constant dollars increased by 1.1% during the month.
The paper product subsector also experienced growth, with sales rising by 5.5%. However, detailed factors contributing to this increase were not specified.
Contrary to the general upward trend, the motor vehicle sector faced a 4.2% decline in sales, falling to $4.6 billion. This was primarily due to retooling activities at an auto assembly plant in Ontario, and the broader shift towards electric vehicle production, which impacted the sales of motor vehicle parts, down by 1.6% to $3.0 billion. Despite the monthly decline, exports of motor vehicles rose by 3.8%, driven mainly by increased light truck exports to the United States. On a yearly basis, motor vehicle sales plummeted by 12.5% in May.
Manufacturing sales varied across provinces, with increases in six provinces. Quebec led with a 1.2% rise to $18.6 billion, marking the fourth consecutive monthly increase, driven by higher production of aerospace products and non-ferrous metals. Year-over-year, Quebec’s sales rose by 6.0%.
Ontario saw a modest 0.5% increase to $31.3 billion, mainly due to higher sales in the food (3.7%) and plastics and rubber (5.7%) subsectors. However, the decline in pharmaceutical and medicine products partially offset these gains. In Toronto, sales fell by 3.5%, largely due to lower sales of chemicals and motor vehicles.
Saskatchewan experienced the largest decline, with sales dropping by 13.1% to $1.8 billion, primarily due to a 15.5% fall in non-durable goods sales. Compared to May 2023, total sales in Saskatchewan were down by 15.5%.
Total inventories edged up by 0.2% to $121.2 billion in May, with higher inventories in 10 out of 21 subsectors. This increase was mainly due to higher goods in process, while finished products saw a slight decline and raw materials remained unchanged. Inventories of transportation equipment, computers and electronics, and wood products increased, partially offset by declines in chemical products and primary metals. Year-over-year, total inventories were down by 1.4%.
The inventory-to-sales ratio remained steady at 1.70 in May, indicating that it would take 1.70 months to exhaust inventories if sales continued at their current level.
Unfilled orders rose for the second consecutive month, increasing by 0.8% to $105.5 billion, driven mainly by higher orders for other transportation equipment and machinery.
The capacity utilization rate for the total manufacturing sector increased from 78.4% in April to 80.4% in May. This rise was attributed to higher production in the chemical, petroleum and coal product, and plastics and rubber subsectors. However, the transportation equipment subsector saw a decrease in its capacity utilization rate by 2.6 percentage points.