Manufacturing sales rise at record pace in June

According to a report by Canadian Manufacturers and Exporters (CME), manufacturing sales rose by a record 20.7% to $48.7 billion in June, extending the 11.6% gain in May. After removing the effect of prices, manufacturing volumes rose 18.4%.

Highlights of the CME report include:

• All 11 major industries saw sales increase, although motor vehicle and parts accounted for more than half the gain.
• Sales were up in 8 of 10 provinces. Ontario and Quebec together accounted for over 90% of the increase.
• The inventory-to-sales ratio declined for the second straight month from 2.16 in May to 1.79 in June.
• Forward-looking indicators were mixed: new orders jumped 23.6%, while unfilled orders fell for the third straight month, down by 1.6%.
• The industry’s capacity utilization rate increased 10.9 percentage points from 62.4% in May to 73.3% in June.
• The manufacturing sector has now recovered 63% of its March and April losses in just two months. However, given that the pace of the economic recovery from the COVID-19 disruption is expected to slow, recouping the remaining 37% will be a more drawn out process.

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