Canadian manufacturers are building up buffer stock, albeit at a declining rate. Year-over-year, total inventory levels are up 22.3%. The inventory to sales ratio stands at 1.68 months. PHOTO courtesy GM.
Total inventory levels for Canadian manufacturers this October increased at their lowest monthly pace, in dollar terms, since March 2021, according to Statistics Canada.
Total manufacturing inventory levels edged up 0.3% to $122.2 billion in October, on higher prices as the volume of inventory levels dipped 0.8% in the same month. The gains were led by the primary metal (+2.8%), plastics and rubber (+2.6%) and wood product (+1.8%) industries and were partly offset by lower inventories in the aerospace product and parts (-2.9%), fabricated metal (-1.9%) and food (-1.1%) industries. Raw materials (+0.7%) as the largest component of the inventory contributed the most to the monthly gains, while finished products (+0.1%) and goods in process (+0.1%) changed little.
Year over year, total inventory levels rose 22.3%.
The inventory-to-sales ratio meanwhile fell from 1.73 in September to 1.68 in October. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.
Unfilled orders remain unchanged
Total value of the unfilled orders remained unchanged in October at $110.9 billion, as higher unfilled orders in the aerospace product and parts (+0.6%) and fabricated metal (+2.8%) industries were largely offset by lower unfilled orders in the computer and electronic product (-3.9%) and primary metal (-5.5%) industries.
The total value of new orders decreased 2.7% to $72.5 billion in October, mostly on lower new orders in the transportation equipment industry (-27.4%) and were partly offset by higher new orders in the petroleum and coal product industry (+12.7%).