Canadian Factory Shipments Rise for Third Straight Month in May

by Warren Seah

Canadian factory shipments experienced a positive trend for the third consecutive month in May, driven by the growth of chemical products and motor vehicles.

According to Statistics Canada, manufacturing sales increased by 1.2% to 72.87 billion Canadian dollars (approximately $55.55 billion) compared to the previous month, after seasonal adjustments. This figure was stronger than the initial estimate of a 0.8% rise.

In terms of constant-dollar sales, accounting for price adjustments, manufacturing sales in May reached C$58.29 billion, reflecting a 2.2% increase. This suggests a higher volume of goods was sold during the month.

A notable growth area was chemical products, where sales rose by 4.8% in May. The increase was primarily driven by higher sales of pesticides, fertilizers, and other agricultural chemicals in Alberta and pharmaceutical and medicine products in Ontario.

Excluding motor vehicles and their parts and accessories, manufacturing sales rose by 0.7% compared to the previous month.

Motor vehicle sales saw a significant recovery in May, increasing by 4.8% following a decline of 3.6% in the previous month. Nearly all car manufacturers in Ontario experienced higher sales during this period. On the other hand, sales of primary metals fell by 6.9% in May, mainly due to lower volume.

Inventory levels held by factories decreased by 0.6%, mainly resulting from lower inventories in 11 out of 21 manufacturing industries. The declines were particularly evident in the food products, petroleum and coal products, and motor vehicle parts sectors.

Unfilled orders, which represent orders that can contribute to future sales if not canceled, decreased by 1.5% in the latest month, reaching the lowest level since May 2022. Additionally, new orders were 1.3% lower than the previous month.

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