The presentation discusses manufacturing sales for Canada. The discussion will look at sales, orders and PMI index. Note: Goods producing is 30% of the GDP for Canada

1. MANUFACTURING SALES –
CANADA – AUGUST 2016
BY: PAUL YOUNG, CPA, CGA

2. AGENDA
• Summary
• Summarization of key sectors
• Key sectors
• Provincial Trends
• PMI /Canada
• Key Comments

3. SUMMARY
• Manufacturing sales increased 0.9% to $51.1 billion in August, reflecting higher sales of food, primary metal, and
petroleum and coal products. Sales were up in 15 of 21 industries, representing 69% of the total Canadian
manufacturing sector. The increase reflected a higher volume of goods sold, as constant dollar sales rose 1.2%.
• The rise in manufacturing sales was widespread in August, with eight provinces recording increases. Ontario posted
the largest sales gain in dollars terms, followed by Alberta and New Brunswick. The only provinces to record declines
were Quebec and Newfoundland and Labrador. Sales were up 0.8% in Ontario, reflecting gains in 17 of 21 industries.
In the machinery industry, sales rose 5.9%, as several industry groups posted higher sales following decreases. Sales
of food (+1.6%), beverage and tobacco products (+10.9%) and chemicals (+1.8%) also contributed to the provincial
increase.
• After a 2.0% decline in July, sales in Alberta were up 2.2% to $5.2 billion in August. The gain was partly the result of
advances in the chemical (+4.2%) and food (+2.2%) industries. Despite the rise in August, manufacturing sales in
Alberta were down 7.6% compared with August 2015. In New Brunswick, sales rose 7.4% to $1.4 billion, as sales of
durable goods increased 24.4% and sales of non-durable goods were up 3.9%.
• After three gains in five months, manufacturing sales in Quebec fell 1.7% to $11.7 billion in August. The decline was
mostly the result of lower production in the aerospace products and parts industry (-6.8%), and lower sales in the
fabricated metal product (-7.0%) and chemical (-5.3%) industries.
Source – Stats Canada

4. CANADA MANUFACTURING SALES BY
SECTOR
Source – Stats Canada

5. Source – Stats Canada

6. MANUFACTURING BY PROVINCE
Source – Stats Canada

7. PMI INDEX - CANADA
https://www.markiteconomics.com/Survey/PressRelease.mvc/dde4b813f7a54b198e5dda422d263d5
• At 50.3 in September, down from 51.1 in
August, the Markit Canada Manufacturing
Purchasing Managers’ Index™ (PMI™)
pointed to only a marginal improvement
in overall business conditions and the
slowest pace of recovery since the upturn
began in March.
• Lower new order volumes and reduced
payroll numbers were the main negative
influences on the headline index,
alongside the sharpest drop in pre-
production inventories since the start of
2016. September data signalled only a
marginal increase in manufacturing
production, and the rate of expansion
continued to soften from the 11-month
peak recorded in May. Survey
respondents noted that lower levels of
incoming new work and renewed efforts
to streamline inventories had acted as
brakes on output growth at their plants.
• Manufacturers indicated a drop in new
work for the first time since February,
although the pace of decline was only
fractional. Anecdotal evidence cited
generally subdued client demand and
lower spending on investment goods in
particular. Moreover, reduced levels of
new business from abroad were recorded

8. KEY QUOTES -
• Canada’s manufacturing sales grew in August, the third consecutive month of increases. Sales rose 0.9 percent
sequentially, as compared with consensus projection of 0.3 percent and July’s rise of 0.1 percent. The scenario was
even better in real terms as volumes rose by a whopping 1.2 percent. The increases were quite widespread and was
led by metals, food and petroleum and coal products, which grew 3.6 percent, 1.7 percent and 2.5 percent
respectively. Refineries were operating in full swing after the wildfires in Alberta. However, seasonal shutdowns at
certain auto assembly factories led to a decline of 2.2 percent in motor vehicle manufacturing, countering the gain
Source - http://www.econotimes.com/Canadas-manufacturing-sales-rise-in-August-uptrend-likely-to-continue-
355181
• The Bank of Canada, which releases its latest forecasts on Wednesday, is projecting a healthy third-quarter recovery
after a major wildfire in the oil-producing province of Alberta in May caused the economy to contract in the second
quarter. "(The report) will provide even more reassurance to the Bank of Canada that third quarter GDP growth
rebounded strongly," Capital Economics economist Paul Ashworth said in a note to clients. The central bank cut
interest rates twice last year to help compensate for falling oil prices and is not expected to move again until early
2018. [CA/POLL] Sales in the petroleum and coal products industry rose by 2.5 percent to C$4.38 billion in August,
the second consecutive monthly gain. "(This) does suggest we are probably seeing some of the resumption of
activity in Alberta trickle through into August," said Andrew Kelvin, senior rates strategist at TD Securities. Sales in
the food industry rose by 1.7 percent in August to a record C$8.57 billion, while the primary metals industry posted
a 3.6 percent gain to reach C$3.89 billion.
• Source – Reuters

9. PRESSURE POINTS
• Impact of new carbon taxation
• Continue growth in hydro rates
• Government needs to streamline regulations

10. • For further information then contact - Paul Young, CPA, CGA @
paul_young_cga@Hotmail.com