By Akhil Shah

OTTAWA (MNI) – Following three consecutive monthly increases,
manufacturing sales fell 0.8% in October to C$48.7 billion, Statistics
Canada reported Wednesday.

Even after sliding 0.8% in October, sales remained second highest
of any month in 2011, coming in just behind September (C$49.054
billion). Of the 21 industries, 13 recorded lower sales in October,
accounting for about two-thirds of Canadian manufacturing. A 1.8%
decrease in sales of non-durable goods contributed the most to the
decline.

The decrease was led by a fall in sales of petroleum and coal
product, and the aerospace product and parts industries. An increase in
motor vehicle parts, computer and electronic product, and wood product
industries partially moderated the decline. In constant dollar terms,
sales retreated 0.9%, declining for the first time after three monthly
gains.

Sales in the petroleum and coal product industry fell 4.3% to C$7.3
billion after increasing for three straight months. This was a result of
maintenance shutdowns at various work plants. Following two months of
increases, sales in the aerospace product and parts manufacturing
dropped 9.7% to C$1.3 billion.

Other sectors that pulled sales lower in October were the food and
paper industries, decreasing 1.1% and 3.6% respectively.

The decline was moderated by increases in sales of motor vehicle
parts (+6.2%), computer and electronic product (+6.3%) and the wood
product (+5.2%) industries.

Since the spring of 2010 inventory levels have continued to trend
upwards, rising for the 13th consecutive month in October. Level
advanced 1.4% in October, after increasing 0.4% in September. Inventory
levels were higher in 13 of the 21 industries in October with
manufacturers of non-durable goods registering a 2.2% increase while
durable goods manufacturers posted a 0.9% rise.

A gain in raw materials (+11.7%), finished products (+6.2%) and
goods-in-process (+9.7%), lifted inventories at the petroleum and coal
product industry to C$4.9 billion, a 8.8% increase from September. Other
industries to contribute to the rise were food (+3.9% and primary metal
(+1.7%) industries.

The inventory to sales ratio increased from 1.30 in September to
1.33 in October, rising for the first time since June.

Unfilled orders orders which will contribute to future sales
assuming the orders are not canceled, decreased for the first time after
nine months of advances. Declines in aerospace product and parts
industry (-4.3%) led the 0.3% decrease in unfilled orders in October.
This was partly offset by a 6.6% increase in railroad rolling stock
industry, the agency reported.

New orders fell 4.7% to C$48.5 billion, after surging 5.0% in
September. The decrease was led by a 11.7% decline in the transportation
equipment industry, reflecting a decrease in unfilled orders of the
aerospace product and parts industry. A fall in fabricated metal
(-20.9%) and petroleum and coal products (-4.3%) industries also pulled
new orders lower in October.

— Akhil Shah is a reporter with Need To Know News

** Market News International – Ottawa **

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