Manufacturing inventories are starting to climb with the build-up particularly pronounced in Canada’s fabricating industry in September. PHOTO courtesy Honda.
Total inventory levels continued to strengthen since the beginning of the 2021, up 1.3% to $122.0 billion in September, on higher inventories in 15 of 21 industries, according to Statistics Canada.
The inventory buildup was most pronounced in the transportation equipment (+3.4%), fabricated metal product (+4.3%) and machinery (+2.9%) industries. The gains were partly offset by declines in the primary metal (-2.3%), petroleum and coal product (-2.4%), and beverage and tobacco product (-3.9%) industries.
All three components of total inventories were up, with raw materials increasing by 1.8%, goods in process by 1.3% and finished products by 0.5%.
Meanwhile, the inventory-to-sales ratio increased from 1.71 in August to 1.73 in September. 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 rise
On a positive note, the total value of unfilled orders rose 1.5% to $109.4 billion in September, on higher unfilled orders in the transportation equipment (+1.5%), machinery (+1.7%) and food (+15.4%) industries. Total value of unfilled orders was up 20.4% on a year-over-year basis.
The total value of new orders increased 0.1% to $72.1 billion in September, mainly on higher new orders of machinery (+13.2%) and was partially offset by lower new orders in the transportation equipment industry (-8.0%).