Manufacturing sales fell 2% in May, StatCan says

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(Image credit: Statistics Canada)

OTTAWA — Sales by Canadian manufacturers fell 2.0% to $71.6 billion in May as auto production fell in the month, Statistics Canada said Thursday.

The agency said the first decline in manufacturing sales after seven straight months of gains came as sales fell in 11 of the 21 industries it tracks.

Transportation equipment sales fell 15.7% in the month to $8.5 billion, as auto industry sales fell 31.9% to $3.3 billion in May due to retooling at auto assembly plants and shortages of semiconductor parts.

Despite the decline, motor vehicle sales were up 41.3% from a year ago.

Primary metal sales fell 4.1% to $6.3 billion for the month, but still posted the second highest sales on record after April.

Meanwhile, rising prices helped petroleum and coal industry sales rise 5.4% to $10.9 billion in May, a new record high.

Machinery sales also hit a record high in May, rising 3.3% to $4.0 billion.

In constant dollars, overall sales fell 3.9% in May, indicating a decline in overall sales volume.

Nikita Perevalov, director of economic forecasts at Scotiabank, said that while the decline in Canadian manufacturing sales in May was not a surprise, the magnitude of the fall was greater than expected once the effects of price increases prices eliminated.

“Overall, this morning’s printout does little to allay concerns about near-term economic activity,” Perevalov wrote in a report.

The manufacturing sales reading comes after Statistics Canada said last month that its preliminary estimate of real gross domestic product pointed to a 0.7% contraction in May.

The Bank of Canada raised its key rate by a full percentage point on Wednesday to 2.5% in an effort to help control inflation.
www.statcan.gc.ca

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