According to Statistics Canada, manufacturing sales increased 1.2 percent to $72.9 billion in May, following a 0.1 percent decline in April, mainly driven by higher sales of chemical products (+4.8 percent), motor vehicles (+4.8 percent) and machinery (+4.2 percent). Sales in primary metal manufacturing decreased the most (-6.9 percent). Year over year, total sales were up 0.2 percent in May.
Total inventory levels declined 0.6 percent to $122.8 billion in May on lower inventories in 11 of 21 manufacturing industries, led by the food product (-3.5 percent), petroleum and coal product (-3.0 percent) and motor vehicle parts (-8.8 percent) industries. Lower raw materials (-1.0 percent) and finished product inventories (-0.8 percent) were responsible for the decline. On a year-over-year basis, total inventories were still up 7.0 percent in May.
The inventory-to-sales ratio decreased from 1.72 in April to 1.69 in May. 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 decreased 1.5 percent to $105.0 billion in May, the lowest level since May 2022. The aerospace product and parts industry contributed the most to the decline (-1.6 percent).
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector rose from 77.5 percent in April to 80.3 percent in May due to higher production. The gains were noticeable in transportation equipment (+7.3 percentage points), non-metallic mineral product (+8.8 percentage points) and chemical (+4.5 percentage points) manufacturing.