Manufacturing sales fell 0.5% to $69.1 billion in September, the second straight monthly decline. The decline was primarily due to lower sales of petroleum and coal products (-7.5%) and lower production of aerospace and aerospace products and parts (-4.2%). Excluding petroleum and coal, overall manufacturing sales rose 0.4% in September.
On a quarterly basis, overall sales fell 1.3% in the third quarter of 2024, the fourth consecutive quarterly decline. Lower sales of transportation equipment (-3.7%) and petroleum and coal products (-3.9%) were primarily responsible for the quarterly decline.
Total sales in constant dollars fell 0.4% month-on-month in September, while the industrial producer price index fell 0.6%.
Petroleum and Coal Products Leads Decline
Sales in the Petroleum and Coal Products segment fell 7.5% to $7.1 billion in September, following a 5.1% decline in August. The September decline was driven by lower sales volumes and prices. Refined petroleum energy product prices (including liquid biofuels) fell 7.9% in September, while sales on a constant dollar basis fell 5.1%. Weaker global energy demand contributed to the decline in petroleum product sales in September.
In the Aerospace Products and Parts group, production fell 4.2% to $2.5 billion in September, after reaching its second-highest level on record in August ($2.6 billion). On a quarterly basis, production fell 1.6% in the third quarter of 2024, following three consecutive quarterly increases. Despite the monthly and quarterly declines, production rose 9.7% year-on-year in September. The increase was partially offset by a 17.9% decline in sales of nonmetallic mineral products.
Sales decline in six provinces, led by Quebec and Saskatchewan
After four straight monthly declines, auto sales rose 2.9% to $4.4 billion in September, mainly due to higher sales in Ontario. On a quarterly basis, sales in this industry group fell 5.1% in the third quarter of 2024, marking the fourth consecutive quarterly decline and the lowest quarterly sales since the fourth quarter of 2022. Re-tooling at some auto assembly plants coupled with lower demand for automobiles was responsible for the decline in the third quarter of 2024.
Exports of motor vehicles and parts fell (-3.5%). Manufacturing sales fell in six provinces in September. The largest declines were recorded in Quebec and Saskatchewan, while sales in New Brunswick increased the most. In Quebec, sales fell 1.1% to $17.8 billion in September, the lowest level of sales since January 2024.
The decline was primarily due to lower sales of transportation equipment (-7.5%), followed by petroleum and coal products (-7.9%). In the transportation equipment sector, production of aerospace products and parts fell 5.8% in September 2024, while sales of motor vehicles fell 7.2%. On a quarterly basis, overall sales in Quebec fell 1.3% in the third quarter, while they were down 0.3% year-over-year in September.
Saskatchewan sales fell 8.4% to $1.8 billion in September, the second consecutive monthly decline, driven by lower sales of nondurable goods (-1.8%). Despite the monthly decline, sales increased on a quarterly basis in Saskatchewan, rising 6.7% to $5.8 billion in the third quarter, mainly due to higher sales of food products.
In New Brunswick, overall manufacturing sales rose 5.3% to $2.1 billion in September, mainly due to a 6.2% increase in sales of nondurable goods.
Total inventories decreased
Total inventory levels fell 0.4% to $120.2 billion in September, the lowest level since July 2022, due to lower inventories in 10 of 21 subsectors. Inventories fell further in the wood products (-4.3%) and primary metals (-2.0%) sectors in September 2024. All three inventory components declined in September, led by finished products (-0.6%) and raw materials (-0.4%).
The inventory-to-sales ratio remained unchanged at 1.74 in September. This ratio measures the time, in months, required to exhaust inventories if sales remain at their current level.
Backlogs Increase
Total backlogs rose 1.6% to $105.3 billion in September, primarily due to higher backlogs in the machinery sector (+21.2%). Backlogs for aerospace and space products and parts saw the largest decline (1.6%).)
Capacity Utilization Decline
The non-seasonally adjusted capacity utilization rate for the overall manufacturing sector fell to 78.6% in September from 79.5% in August, due to lower output. The decline was more pronounced in the petroleum and coal products subsectors (-5.2 percentage points), primary metals (-4.4 percentage points), and manufactured metals (-2.0 percentage points). The decline was partly offset by higher capacity utilization in the wood products subsector (+4.9 percentage points). Seasonally adjusted data and trend cycle estimates are subject to revision as additional observations become available. Such revisions can be large and even reverse the movement, particularly for reference months near the end of the series or during periods of economic turmoil.
Nondurable goods industries include food, beverages and tobacco products; textiles and textile products; apparel, leather and related products; paper, printing and related support activities; petroleum and coal products; chemicals; and plastics and rubber products.
