Manufacturing numbers released by Statistics Canada point to a weakening Canadian economy, with a monthly decline in manufacturing sales of 0.9%.

Three of the four western provinces showed increases in manufacturing sales, with B.C., Saskatchewan and Alberta on the right side of the ledger. Manitoba, however, experienced a setback in March.

Benefits of the Canadian dollar exchange rate with the U.S. dollar are showing up in the wood manufacturing sales numbers. Four provinces posted positive sales growth in March, supporting a positive trend for manufacturing sales over the past 12 months.

 

British Columbia

British Columbia’s economy continues to tear along, posting monthly gains from February to March of 2.9% and supporting a 12-month growth spurt of 3.0%. This reinforces a three-year trend of increasing gains in manufacturing sales of 11.8%, seasonally adjusted.

Non-durable goods increased from February to March by 6.9% led by gains in chemical manufacturing sales of 2.6%. For the past 12 months, non-durable goods manufacturing increased by 2.8%, again supported by gains in chemical manufacturing sales.

Even though wood product manufacturing sales increased 0.9% and machinery manufacturing was up 4.0% from February to March, durable goods manufacturing in British Columbia saw a decline of -0.2%. Wood product manufacturing makes up about 38% of durable goods manufacturing and machinery and manufacturing 10%. For the past 12 months, durable goods manufacturing in British Columbia increased by 3.3% led by wood product manufacturing (4.7%) and primary metal manufacturing (24.6%).

Alberta

Alberta’s manufacturing sector showed a modest increase in manufacturing sales of 0.2% between February and March up from the past 12-month period of declining manufacturing sales of -15.3%. Monthly increases in petroleum and coal product manufacturing (4.5%), chemical manufacturing, (2.5%), wood product manufacturing, (2.5%), primary metal manufacturing (1.5%) and fabricated metal manufacturing (7.5%) helped to push Alberta’s manufacturing sales forward last month from the 12-month slump.

Overall manufacturing sales for Alberta have been following a downward trend over the past five years. From March 2011 to March 2016 manufacturing sales have declined 11.2%. Declines in petroleum manufacturing sales (-45.0%), chemical manufacturing (-6.0%), machinery manufacturing (-43.8%) and transportation equipment (-15.6%) have depressed overall manufacturing sales. Total manufacturing sales in March 2016 were $4.9 billion down from a high of $6.8 billion in July 2014.

Food manufacturing, which makes up almost 22.7% of Alberta’s manufacturing sales, declined -3.4% from February to March following a 12-month trend of declining sales of -1.5%. However, food manufacturing sales have shown a stronger long term, since March 2011, food manufacturing sales have increased 23.5%.

Alberta’s bright spot is the wood product manufacturing sector buoyed by the low Canadian dollar. Making up about 6.1% of manufacturing sales, this industry increased 2.5% from February 2016 to March 2016 with a 12-month increase of 4.0%.

Saskatchewan

Overall manufacturing sales in Saskatchewan increased from February to March of 1.5% in contrast to a 12-month decline of -5.9%. Non-durable goods were up 2.1% over the month with durable sales also contributing 0.4% to growth. However, both non-durable and durable goods declined over the 12-months ending March 2016 by -5.8% and -6.2% respectively for total manufacturing sales decline of -5.9%. This goes against a 5-year trend of an overall manufacturing sales increase of 9.0%.

Food manufacturing is an important contributor to Saskatchewan manufacturing sales making up about 27.7% of total sales and led sales of non-durable goods with a 2.0% increase from February to March and 7.4% for the 12-month period ending March 2016. Chemical manufacturing is the next largest contributor to manufacturing sales at 15.1% but declined by 3.9% from February to March continuing a 12-month decline of 4.4% since March 2015.

Other notable manufacturing sectors in Saskatchewan include machinery manufacturing and fabricated metal product manufacturing which were both down over the monthly period at -2.0% and -0.4% respectively. Wood manufacturing sales make up about 4.0% of total sales and increased 2.0% from February to March supporting a 12-month increase of 19.5%.

Manufacturing 2025 Action Plan, an initiative launched by the Canadian Manufacturers & Exporters (CME) and the Saskatchewan Manufacturing Council in December 2015, set an ambitious goal for the province’s manufacturing sales to reach $25 billion by 2025. The current slowdown in demand across domestic and international markets is slowing progress towards that goal. For the twelve-month period ended March 2016, Saskatchewan manufacturing sales reached $13.8 billion (seasonally adjusted), a decrease of 12.5% from the 12 months prior.

Manitoba

Manufacturing sales in Manitoba slid from $1.42 billion in February to $1.39 billion in March 2016 or -2.7% continuing a 12-month trend of declining manufacturing sales of -1.7%. For the 12-month period ending March 2016, manufacturing sales seasonally adjusted were $16.7 billion.

Almost two-thirds of Manitoba’s manufacturing sales is led by four industry groups: food manufacturing sales making up 23.7% of sales, transportation equipment manufacturing (17.3%), primary metal manufacturing (11.5%) and aerospace product and parts manufacturing at 10.6% of sales.

Of the four largest industries, transportation equipment manufacturing and aerospace products and parts manufacturing increased by 8.9% and 17.8% respectively between February and March 2016. Food manufacturing declined by -6.6% and primary metals manufacturing decreased by -1.8% over the same monthly period.

For the twelve-month period ending March 2016, gains in transportation equipment manufacturing (17.4%) and aerospace product and parts manufacturing (16.4%) tempered the drop in sales of other industries. food manufacturing (-4.6%), chemical manufacturing (-17.6%), and machinery manufacturing (-15.2%).

Janice Plumstead is a Senior Economist

Send comments or feedback