MNI 5 THINGS:Canada Dec Mfg Sls -1.3%,Ex Petro and Coal -0.3%>

--5 Things We Learned From the Canadian Monthly Manufacturing Survey

By Courtney Tower

     OTTAWA (MNI) - The following are the key points from the December 

data on Canadian manufacturing sales released Thursday by Statistics 

Canada, featuring a large -1.3% drop in sales overall. 

     - Manufacturing sales fell to C$56.4 billion in December as a major  

fall below the -0.2% expected in an MNI survey of analysts. The 

principal cause was a 10.4% decline in the petroleum and coal product 

industry, with volumes falling about 5.2% or half of that decline. It 

was the second consecutive month of decline for the petroleum and coal 

industry in Canada. There also was a 2.3% decline in food manufacturing 

sales after two consecutive monthly increases. Overall, sales fell in 

72.7% of Canadian manufacturing sales, in 12 of 21 industries. The 

November estimate was revised down by 0.3 percentage points, with sales 

now down 1.7%. In volume terms, sales were down 1.2% in December. 

     - For the year 2018, manufacturing sales rose 5.4% for the third 

consecutive annual gain, after a 6.1% increase in 2017. In constant 

dollars, sales also were up for the third straight year, by 2.1%, versus 

+3.7% in 2017. Average prices in the sector rose 3.9%. Inventories 

increased 9.7% in 2018. Petroleum and coal sales were up 15.2% in 2018 

but volumes were down 1.5%. 

     - For the fourth quarter in 2018 nominal manufacturing sales were 

down 1.8% versus +1.6% in the third quarter. Volumes were down 1.1% 

versus +1.2% in the third quarter. Petroleum and coal sales were down 

10.6% in nominal terms and down 5.1% in real terms. Machinery sales  in 

the fourth quarter were down -1.8% nominally and down -2.3% by volumes. 

     - Inventories rose by 0.3% from November and were up 9.7% on the 

year. The inventory-to-sales ratio rose to 1.50 from 1.48 in November, 

reaching its highest levels since June 2009. Forward-looking indicators 

were mixed, with unfilled orders up 0.6% and new orders down 0.8%. 

     - The unadjusted capacity utilization rate decreased from 79.4% in 

November to 75.9% in December on widespread declines. Statistics Canada 

said these declines "may reflect to some extent seasonal variations." 

The largest declines were in non-metallic mineral products and in the 

plastics and rubber industries. 

     --MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com         

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