MNI 5 THINGS:Cdn Mfg Sales +1.1% As Refinery Productn Rebounds>

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

By Yali N'Diaye

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

on Canadian manufacturing sales released Thursday by Statistics Canada: 

     - Manufacturing sales increased a further 1.1% in June, following a 

1.5% increase in May, roughly in line with analysts' expectations of a 

1.0% gain in a MNI survey. However, the details were not as strong, 

despite the 0.1-point upward revision to May's reading. 

     - Despite the overall gain, sales decreased in 12 of 21 industries, 

representing 58.8% of manufacturing trade, led by chemicals and food. Of 

note, primary metals edged down 0.3% after four months of increases. 

Tariffs imposed by the U.S. on steel and aluminum came into effect in 

June. Total manufacturing sales increased 2.5% in the second quarter 

after a 1.4% gain in the first quarter. On a volume basis, however, more 

relevant to real GDP, sales growth slowed to 0.4% from 0.6%. 

     - The June sales rebound largely owed to a return to more normal 

activity in refinery following temporary shutdowns and spring 

maintenance that started in April and continued into May. As a result, 

sales of petroleum and coal soared 15.9% in June, entirely due to higher 

volumes. Manufacturing sales excluding petroleum and coal actually 

contracted 0.4% on the month. Real sales excluding petroleum were down 

1.2%, while total real sales rose 0.7% in June after increasing 0.9% in 

May. The auto sector also supported sales in June, with a 2.8% gain on 

the month. Sales excluding autos and parts were up 0.9%. 

     - Higher refinery activity translated into higher capacity 

utilization rates for the sector (89.8% versus 69.8% in May), and for 

the overall manufacturing industry (83.5% after 82.8% in May, the 

highest since March 2018). 

     - Forward-looking indicators sent mixed signals in June, with 

unfilled orders up 1.7% and new orders down 1.8%, the largest decline 

since November 2017. Inventories rose 0.5% in June, leaving the 

inventory-to-sales ratio little changed at 1.41 after 1.42 in May. 

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

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