Manufacturing sales surge upwards to start 2021

According to the Canadian Manufacturers & Exporters (CME), manufacturing sales rose 3.1 per cent to $56.2 billion in January, pushing sales above pre-pandemic levels for the first time since the start of the crisis.
In constant dollars, sales were up 1.1 per cent, the first time in four months that shipment volumes increased.

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The near-term outlook is also upbeat, with the recent run-up in commodity prices and the massive US fiscal stimulus package boding well for exports of manufactured goods.
That said, the Biden administration’s commitment to expand Buy American provisions poses a negative risk to this outlook.

Highlights

• The increase in sales spanned 9 of 11 major industries. Continuing recent trends, the woods product sector remained a key contributor to growth.
• Sales were up in 8 of 10 provinces, led by Ontario and Quebec.
• The inventory-to-sales ratio decreased from 1.59 in December to 1.57 in January.
• Forward-looking indictors were encouraging, with new and unfilled orders up 6.15 and 2.3%, respectively.
• The capacity utilization rate increased from 75.7% in December to 76.8% in January.
• After a tough 2020, manufacturers started the new year on a brighter note, with sales rising at the fastest rate since July 2020.