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)...
Post a Comment
Read more

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Janet Yellen from China supporter to Hawk...

There is rarely serious news in the world these days, it seems that most newspapers are filled with headlines and little else, and then Ms Yellen went to China.  Secretary Yellen has long been known in the Biden administration as the voice of moderation when dealing with China, yet as her trip which concluded yesterday a hawk was born:  She warned the Chinese against dumping goods in the United States.    fighting words! The American administration is very concerned about the lack of Chinese domestic consumption.   Even before the COVID-19 epidemic, there were already the beginning signs of a slowdown, automobile sales were off.   China is facing domestic deflation (a clear sign of collapsing demand) China imports few consumer goods, they import raw materials and intermediary goods.   It seems that the American administration is concerned that the Chinese administration will dump consumer goods abroad to keep its manufacturing machinery ...
Post a Comment
Read more