Manufacturers give back gains

OTTAWA — Eighteen of 21 manufacturing industries posted sales declines in March, representing 76 percent of total sales.

According to Stats Canada’s monthly survey on manufacturing, total factory sales retreated 1.6 percent to $49.0 billion — and down 7.7 percent compared to the same period last year. A sharp downturn in motor vehicle manufacturing was once again cited as the chief factor.

March’s decline was the first in 2008 as manufacturers had recovered slightly from December’s slowdown (-3.6%). Market uncertainty in the U.S., Canada’s dominant trading partner, has contributed to volatility in many manufacturing industries.

At the provincial level, Ontario (-2.9%) and Alberta (-1.4%) led the decreases among the six provinces reporting lower sales in March. Quebec’s sales rose 0.3% on the strength of the aerospace industry.

According to StatsCan, labor strife at some North American auto parts plants contributed to a significant drop (-6.2% to $4.0 billion) in the Canadian production of vehicles and parts — against a backdrop of other factors affecting the industry, including a weakening US demand and rising energy prices.

Shipping delays contributed to a 3 percent decrease in manufacturing sales of chemical products in March. In addition, computers and electronic products manufacturers posted a 7.6 percent reduction in sales, the third decline in five months.

On the positive side, robust demand for aerospace products and parts drove up production levels 17 percent to $1.7 billion in March.

Inventories Edge Higher:

Meanwhile, a sizeable 1.1 percent drop in inventories of raw materials was entirely offset by increases in goods in process (+1.1%) and finished products (+1.3%). As a result, total inventories remained little changed in March at $65.5 billion (+0.2%), which followed a 0.6% decline in February.

On the basis of weaker manufacturing sales during the month, the inventory-to-sales ratio advanced to 1.34 in March from 1.31 in February.

The inventory-to-sales ratio is a measure of the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.