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Manufacturing sales in Canada decline first time since 2009

Staff Writer | October 28, 2016
In 2015, Canadian manufacturing sales fell 1.5% to $609.5 billion, ending five consecutive years of growth.
Canada factory
Canadian manufacturing   Sales fell 1.5% to $609.5 billion
Sales declined in 9 of 21 industries, after decreasing in 3 of 21 industries in 2014.

Constant dollar sales were down 0.9% to $550.8 billion, as a result of lower volumes of goods sold. According to the Industrial Product Price Index, the average price of manufactured goods decreased 0.9% in 2015.

In 2015, the durable goods industry accounted for 53% of total manufacturing sales, and the non-durable goods industry 47%. Durable goods sales increased 2.8%, the sixth consecutive gain, while sales in the non-durable goods industry decreased 6.1%, the first decline since 2009.

The transportation equipment, food, and petroleum and coal product industries were the top sales contributors in the manufacturing sector. These three industries were responsible for nearly half of total manufacturing sales in 2015.

The petroleum and coal product industry was mainly responsible for the decrease in 2015. Sales declined 28.6% to $59.3 billion, reflecting a 22.3% drop in the average price of refined petroleum products.

The industry accounted for 9.7% of total manufacturing sales in 2015, down from 13.4% in 2014, and down from the peak of 14.5% in 2012. Excluding petroleum and coal products, manufacturing sales increased 2.6% in 2015.

Sales in the primary metal industry decreased 6.6% to $44.7 billion in 2015, following a 10.1% increase in 2014. The decline was due to lower sales in steel product manufacturing from purchased steel (-18.5%), and iron and steel mills and ferro-alloy manufacturing (-12.8%).

Sales in the primary metal manufacturing industry accounted for 7.3% of total manufacturing sales, down slightly from 7.7% in 2014. Average prices in the industry edged up 0.5% in 2015.

In the chemical industry, sales declined 2.4% to $48.6 billion, after two consecutive annual increases. The decrease was attributable to lower sales in three of seven chemical sub-industries.

Partially offsetting these declines, sales in the transportation equipment industry rose 8.9% to $123.0 billion in 2015, the fifth increase in six years.

This industry represented 20.2% of total manufacturing sales. Motor vehicles (+8.5%), motor vehicle parts (+9.2%), and aerospace products and parts production (+10.0%) were responsible for the advance.

The gains in motor vehicles and motor vehicle parts manufacturing reflected higher prices and a shift toward the production of higher-end models.

The price of motor vehicles grew 11.6% in 2015, while the price of motor vehicle parts was up 7.7%. The advance in aerospace product and parts was mainly attributable to the depreciation of the Canadian dollar, as most sales in the sub-industry are reported in US dollars.

The food manufacturing industry recorded its eighth consecutive year of sales growth in 2015. Sales increased 2.9% to $95.7 billion, a record level since the series began in 1992.

The gain in 2015 was due to higher sales in the seafood product preparation and packaging industry, the bakery and tortilla manufacturing industry, and the other food manufacturing industry (which includes coffee, tea, and snack food manufacturers).

The food industry accounted for 15.7% of total manufacturing sales. Prices were up 3.1% in 2015, following a 3.7% rise in 2014.