- Summary - Manufacturing sales by sector - Automotive - Provincial Trends - Manufacturing issues

1. Manufacturing – Canada –
Analysis and Trends – April 2016
By: Paul Young, CPA, CGA

2. • This presentation is on perspective when it comes to Metal
Fabrication

3. Paul Young - Presenter
Bio
• CPA/CGA
• 25 years of experience in Academia, Industry and Financial solutions
• Youtube Channel -
https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

4. Agenda
• Summary
• Manufacturing sales by sector
• Automotive
• Provincial Trends
• Manufacturing issues

5. Summary
• Canadian manufacturing sales were better than expected for April at +1% m/m in nominal terms and +1.4% m/m in volume terms as prices fell by 0.5%
m/m.
• There was some very good news in the number. New orders surged by 5.8% m/m in real terms and 7.8% m/m in nominal terms. The real manufacturing
orders number is by no means a post crisis high (orders were higher in real terms as recently as January 2016) but at least the number reflects some type
of momentum and pick up in the manufacturing sector.
• The number leaves constant dollar manufacturing sales tracking at +2.3% q/q annualized to start Q2. This is a pretty good start given the March drop-off in
sales of -0.9% m/m, and lends some hope that Q2, which is widely expected to be a soft quarter in Canada due to a drop-off in exports and the
implications of the Alberta fire, might at least continue to exhibit some positives in terms of underlying manufacturing sector momentum.
• Canadian industries operated at 81.4% of their production capacity in the first quarter, up from 80.9% in the previous quarter. The mining, quarrying, and
oil and gas extraction industries were the main source of this increase.
• The sectoral outcomes were extremely mixed. It was a pretty peculiar print with some sectors posting big gains
• petroleum and coal products at +8.3% m/m a
• air and rail at +6.3% m/m and +39.5% m/m respectively)
• 11 of 21 sectors representing 45% of industry reported contractions. T
• sectors included food manufacturing (-0.3% m/m),
• beverages (-0.6% m/m), textiles and clothing (-4.4% m/m on the latter), paper (-0.6% m/m),
• plastics and rubber (-2.1%m/m), machinery (-0.9% m/m),
• electrical equipment (-3.3% m/m), and motor vehicle parts (-1.1% m/m).
• The implication is that some of the sectors that showed unexpected strength could well edge down as the quarter progresses, particularly
petroleum and coal products.

6. Summary / Key Sector

7. Manufacturing Sales / Sector
Key points
• Commodity sensitive
business
• Oil and Gas
• Food Production
• Machinery & Equipment
• Less capital investment
• Transportation sector
carrying manufacturing
• Aerospace
• Automotive
• Transit (Trains an
buses)
• Shipbuilding (New
frigate contract)

8. Automotive / Trends

9. Provincial / Summary
source BNN, Stats Canada and Toronto Star
• Sales were up in six provinces,
with Alberta, Quebec and
Ontario posting the largest
gains.
• Alberta gained 3.5 per cent to
nearly $5.1 billion, helped by
the 19.6-per-cent increase in
petroleum and coal products.
• Quebec increased 1.4 per cent
to $11.6 billion, driven by an
11.2-per-cent increase in the
aerospace product and parts
industry, while Ontario
climbed 0.4 per cent to $24.9
billion due to higher sales in
the primary metals industry.
Source: Toronto Star

10. Issues – Manufacturing
• Canada
• Ontario new carbon tax/price
• Alberta carbon tax/price change
• Softwood Lumber agreement (new agreement)
• Sluggish growth
• Canada 1.4% for 2016 (revised down)
• USA 1.9% for 2016 (Revised down)

11. Sources
• Contact: paul_young_cga@Hotmail.com
• Other links
• Canadian Manufacturing – https://www.youtube.com/watch?v=Ea-kch0s94E
• Manufacturing sales by year - http://www.statcan.gc.ca/tables-tableaux/sum-
som/l01/cst01/manuf33g-eng.htm
• Alberta Competitiveness -
http://www.slideshare.net/paulyoungcga/competitiveness-alberta-june-2016-
62916680
• Retail Sales - https://www.youtube.com/watch?v=BzBFIxFy5Fo
• Profitability - https://www.youtube.com/watch?v=lL0k153FQlI
• Cultivating Innovation - https://www.youtube.com/watch?v=BEIP8kV5IWg
• How to grow an economy - https://www.youtube.com/watch?v=lzV8L1tU6k0
• Government Policy - https://www.youtube.com/watch?v=9mDGerSGIg0
• Infrastructure - https://www.youtube.com/watch?v=RDI5oMt1SIM