Skip to main content

Canada’s manufacturing sales increased 4.5% in January


I don’t know if this proves anything about Canadian productivity, but it remains that Canadian manufacturing is firing on all cylinders!  In constant dollar, the sales number were a bit higher at 5.5% growth, an indication that there is some margin compression here, which is not surprising if one considers that the CAD has gone from parity to 1.03 in the space of a few weeks.

(Source:  StatsCan)

Moreover, the advance was broad base, with 17 of 21 industry showing increase in sales (but the big winners were cars, car parts, and aerospace).  Part of the January increase is weather related (December was brutal in the U.S.) the automotive segment saw a 26% increase in January (accounts for 10% of all Canadian manufacturing sales), but the aerospace growth of 25% had nothing to do with weather (3% of Canada’s manufacturing sales) and this increase was the single largest for the past 18 months.

In terms of geographic concentration the big winners were Ontario (+5.8%) and Quebec (+7.4%).  But since these are the most exposed provinces to the biggest “winners” segments this outcome is not surprising.

These buoyant sales level have increased demand expectation, and inventories have also risen to meet future demand, but is also a reflection that increase in sales will automatically translate into higher inventories (although the automobile sector saw a 25% drop in inventories – also the result of poor December 2010 weather conditions – which lead to inventory draw downs).

This data point should give the BoC additional ammunition to raise interest rates in June.  The big imponderable is the situation in Japan, and PPI inflation south of the border (rising 1.6% when the market was expecting 0.6%...)

Popular posts from this blog

Ok so I lied...a little (revised)

When we began looking at farming in 2013/14 as something we both wanted to do as a "second career" we invested time and money to understand what sector of farming was profitable.  A few things emerged, First, high-quality, source-proven, organic farm products consistently have much higher profit margins.  Secondly, transformation accounted for nearly 80% of total profits, and production and distribution accounted for 20% of profits: Farmers and retailers have low profit margins and the middle bits make all the money. A profitable farm operation needs to be involved in the transformation of its produce.  The low-hanging fruits: cheese and butter.  Milk, generates a profit margin of 5% to 8%, depending on milk quality.  Transformed into cheese and butter, and the profit margin rises to 40% (Taking into account all costs).  Second:  20% of a steer carcass is ground beef quality.  The price is low, because (a) a high percentage of the carcass, and (b) ground beef requires process
Post a Comment
Read more

21st century milk parlour

When we first looked at building our farm in 2018, we made a few money-saving decisions, the most important is that we purchased our milk herd from a retiring farmer and we also purchased his milking parlour equipment.  It was the right decision at the time.  The equipment dates from around 2004/05 and was perfectly serviceable, our installers replaced some tubing but otherwise, the milking parlour was in good shape.  It is a mature technology. Now, we are building a brand new milk parlour because our milking cows are moving from the old farm to the new farm.  So we are looking at brand new equipment this time because, after 20 years of daily service, the old cattle parlour's systems need to be replaced.  Fear not it will not be destroyed instead good chunks will end up on Facebook's marketplace and be sold to other farmers for spare parts or expansion of their current systems. All our cattle are chipped, nothing unusual there, we have sensors throughout the farm, and our milki
Post a Comment
Read more

So we sold surplus electricity one time last summer...(Update)

I guess that we will be buying an additional tank for our methane after all.   Over the past few months, we've had several electricity utilities/distributors which operate in our region come to the farm to "inspect our power plant facilities, to ensure they conform to their requirements".  This is entirely my fault.  Last summer we were accumulating too much methane for our tankage capacity, and so instead of selling the excess gas, that would have cost us some money, we (and I mean me) decided to produce excess electricity and sell it to the grid.  Because of all the rules and regulations, we had to specify our overall capacity and timing for the sale of electricity (our capacity is almost 200 Kw) which is a lot but more importantly, it's available 24/7, because it's gas powered.  It should be noted that the two generators are large because we burn methane and smaller generators are difficult to adapt to burn unconventional gas, plus they are advanced and can &qu
Post a Comment
Read more