Manufacturing sales rose for a fifth consecutive month in June, increasing 0.1 per cent to $78.8 billion, according to Statistics Canada, as gains in chemicals and transportation equipment offset a sharp decline in petroleum and coal products.
Statistics Canada said sales increased in 15 of the 21 manufacturing subsectors, led by a six per cent increase in chemicals and a 2.8 per cent gain in transportation equipment. Petroleum and coal products posted the largest decline, falling 14.1 per cent.
Excluding petroleum and coal products, manufacturing sales increased 2.6 per cent in June. Overall manufacturing sales were up 14.5 per cent from a year earlier, it said.
Second-quarter sales hit record
Statistics Canada said manufacturing sales in current dollars increased 9.3 per cent to $235.1 billion in the second quarter, marking a fourth consecutive quarterly increase and the highest level on record.
Petroleum and coal products, up 33.7 per cent, and transportation equipment, up 14.7 per cent, contributed the most to the quarterly increase. Sales in miscellaneous manufacturing declined 14.9 per cent, the largest subsector decline in the quarter.
Excluding petroleum and coal products, manufacturing sales increased 6.1 per cent in the second quarter, said the report.
On a constant-dollar basis, total manufacturing sales increased 4.6 per cent, led by transportation equipment. In June, constant-dollar manufacturing sales rose 1.2 per cent, while the Industrial Product Price Index fell 1.4 per cent.
Chemical sales drive monthly increase
Statistics Canada said sales in the chemical subsector increased six per cent to $6.3 billion in June, the fourth consecutive monthly gain and the highest level since October 2022.
Constant-dollar sales in the subsector increased 6.8 per cent. The increase was driven largely by higher sales of pharmaceutical products, as well as resin, synthetic rubber, and artificial and synthetic fibres and filaments.
Chemical product sales rose 10.9 per cent in the second quarter, marking the subsector's second consecutive quarterly gain, Statistics Canada said.
Transportation equipment sales increased 2.8 per cent to $12.4 billion in June, the fifth consecutive monthly increase. The federal agency said sales increased in most transportation equipment industry groups, with motor vehicle parts up 6.2 per cent and aerospace product and parts up six per cent.
Exports of motor vehicles and parts also increased 2.9 per cent in June, according to Statistics Canada. Quarterly sales in the transportation equipment subsector rose 14.7 per cent to $36 billion.
Petroleum and coal product sales declined 14.1 per cent to $10.1 billion in June after three consecutive monthly increases.
The report said the decline was driven by lower prices for petroleum and energy products, with constant-dollar sales falling 6.1 per cent. Exports of refined petroleum energy products, including liquid biofuels, fell 16.8 per cent during the month.
Despite the monthly decline, petroleum and coal product sales were up 47.4 per cent from a year earlier. Quarterly sales increased 33.7 per cent in the second quarter.
Quebec, Alberta lead provincial gains
Manufacturing sales increased in seven provinces in June, with Quebec and Alberta recording the largest gains, Statistics Canada said.
In Quebec, sales increased 1.5 per cent to $20.3 billion in June after a one per cent decline in May. The gain was driven primarily by a 9.4 per cent increase in aerospace products and parts and a 5.2 per cent increase in primary metals.
It noted that said aerospace production in Quebec reached $2.1 billion in June, the highest level on record. Higher sales of alumina and aluminum production and processing contributed to the increase in primary metals.
Quebec's total manufacturing sales increased 6.1 per cent in the second quarter.
Alberta manufacturing sales increased 1.6 per cent to $10.8 billion in June, with gains in 13 of the 21 subsectors. Chemical sales rose 18 per cent, while food sales increased 3.1 per cent.
The report said Alberta manufacturing sales rose 21 per cent in the second quarter, primarily because of a 37.8 per cent increase in petroleum and coal product sales.
Inventories and unfilled orders rise
Total manufacturing inventories increased 0.6 per cent to $126.8 billion in June, said Statistics Canada.
Inventories of goods in process increased two per cent and raw materials rose 0.2 per cent, while finished product inventories declined 0.3 per cent.
Inventories increased in 11 of the 21 subsectors, led by transportation equipment, up 3.1 per cent, and machinery, up two per cent. Petroleum and coal product inventories declined 3.6 per cent.
On a quarterly basis, total inventory levels increased two per cent in the second quarter.
The inventory-to-sales ratio increased to 1.61 in June from 1.60 in May. Statistics Canada said the ratio measures the time, in months, that would be required to exhaust inventories if sales remained at their current level.
Unfilled orders reached a record $131.8 billion in June after increasing 1.2 per cent. The increase was driven largely by the aerospace product and parts industry group, where unfilled orders rose 2.4 per cent.
Statistics Canada said total unfilled orders increased 8.4 per cent in the second quarter.
Capacity utilization edges higher
The manufacturing sector's capacity utilization rate, not seasonally adjusted, increased to 82.3 per cent in June from 82.2 per cent in May, said the report.
The most noticeable increases were recorded in non-metallic mineral products, where the rate rose 4.3 percentage points, primary metals, up 1.9 percentage points, and machinery, up 0.6 percentage points.
The transportation equipment subsector recorded a 2.9-percentage-point decline in its capacity utilization rate during the same period, it added.