August Canadian Manufacturing Sales Rise 0.9%, Orders Dip

Canadian manufacturing sales increased 0.9% in August following a 0.1% gain the previous month and the gain was higher than the expected advance of 0.3% for the month. The second successive decline in orders will offset any positive impact from the headline data.

There was a 1.0% decline in sales on an annual basis, while, in volume terms, there was a 1.3% gain on the year.

New orders declined 0.9% on the month to give a 3.2% annual decline, while unfilled orders fell by 1.3% to give an annual fall of 7.5%. There was some negative impact from a stronger Canadian dollar on the month given that aircraft orders are priced in US dollars, but overall orders declined for the second successive month.

Inventories fell 0.5% to give an annual decline of 3.2% and the inventory/sales ratio declined to 1.39 from 1.41 the previous month.

Sales increased in 15 of the 21 industries on the month representing 69% of the total sector.

Sales in the food manufacturing sector increased 1.7% to a record high with a 5.4% annual increase. There was also a strong increase in primary metals output of 3.6% on the year to give a 7.8% annual gain.

There was an increase of 2.5% in the petroleum and coal sector, although still with a 12.9% annual decline. In contrast, there was a disappointing reading for the transport sector with a 1.1% decline and 3.5% annual retreat.

The sales data will offer some underlying encouragement, but the decline in orders offers a more sobering assessment and will cause some underlying doubts whether stronger sales will be sustained.

The Canadian dollar strengthened after the data with USD/CAD dipping to 1.3060 from 1.3080, although the move was pared quickly given the dip in orders.


Tim is a contributing author to He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.