The inventory-to-sales ratio has declined to 1.68 months for Canadian manufacturers.
Canadian manufacturing total inventory levels dropped 0.5% to $121.6 billion in November, marking the first monthly decrease since December 2020, according to the latest data from Statistics Canada.
The drop was a result mainly from lower inventories in the machinery (-4.1%) and transportation equipment (-0.8%) industries, two key customers for Canadian metalworking job shops.
In contrast, the food (+1.0%) and computer and electronic product (+1.9%) industries posted the largest increases. Of the inventory components, goods in process (-1.6%) and raw materials (-0.9%) fell, while finished products increased 1.0%.
The inventory-to-sales ratio declined from 1.69 in October to 1.68 in November. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Meanwhile, the total value of unfilled orders for Canadian manufacturing fell for the second consecutive month, down 0.8% to $109.6 billion in November, with the decrease widespread across industries, led by the aerospace product and parts (-0.9%, another important customer for job shops. However, higher unfilled orders of computer and electronics (+2.3%) and motor vehicles (+5.0%) partially offset the decline.
The value of new orders decreased for the second consecutive month, down 0.3% to $71.4 billion in November. Lower new orders in the aerospace product and parts (-26.5%), and fabricated metal product (-6.1%) industries played dominant roles in the monthly decline, while higher new orders in the motor vehicle (+20.8%), computer and electronics (+35.3%) and primary metal (+5.6%) industries partly offset the decline.