According to Statistics Canada, Canadian manufacturing sales increased 0.3 percent to $72.3 billion in April, mainly on higher sales of motor vehicle parts (+25.1 percent) and petroleum and coal products (+4.3 percent). This was the second consecutive monthly increase for the sector. Sales in the primary metal industry (-5.4 percent) declined the most. On a year-over-year basis, total sales were down 1.6 percent in April.
Following a 1.7 percent increase in March, sales of motor vehicle parts increased 25.1 percent to $3.8 billion in April, the highest level on record. The gains were mainly attributable to a significant increase in sales of engines and other motor vehicle parts in Ontario leading to increased exports of motor vehicle engines and motor vehicle parts (+10.0 percent). With the gain in April, sales in the motor vehicle parts industry were 41.0 percent higher compared with April 2022. As the supply chain issues continue to ease, transportation equipment manufacturers were able to increase production in the first four months of 2023 compared with the same months a year earlier to meet market demands and reduce order backlogs.
Primary metal sales decreased 5.4 percent to $5.7 billion in April on declines in all primary metal industries, led by the non-ferrous metal (except aluminum) production and processing (-25.5 percent) and iron and steel mills and ferro-alloy manufacturing (-16.8 percent) industries. Real sales in the primary metal industry were down 5.8 percent. While higher demands for precious metals impacted prices of gold (+3.0 percent) and silver (+12.3 percent) in April, an unexpected contraction in manufacturing activities in China due to a lack of global demand led to the decrease in primary metal sales. Year-over-year sales in the primary metal industry declined 11.6 percent in April.
Total inventory levels were unchanged at $123.8 billion in April. Higher inventory levels of goods in process (+0.3 percent) were offset by lower levels of raw materials (-0.1 percent) and finished products (-0.1 percent). At the industry level, inventories of the primary metal (+1.9 percent) and machinery (+1.0 percent) industries rose in April, while inventory levels declined in the paper product (-4.8 percent) and other transportation equipment (-10.9 percent) industries.
The inventory-to-sales ratio decreased from 1.72 in March to 1.71 in April. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Total unfilled orders edged down 0.2 percent to $106.2 billion in April, mostly on lower unfilled orders in the primary metal industry (-8.1 percent). This was the second consecutive monthly decline in total unfilled orders.
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector fell from 80.9 percent in March to 77.4 percent in April due to lower production. Capacity utilization rates were down in 18 of 21 industries, most notably in the transportation equipment (-5.9 percentage points), primary metal (-4.5 percentage points) and fabricated metal product (-6.2 percentage points) industries.