By Akhil Shah

OTTAWA (MNI) – Canadian manufacturing sales unexpectedly increased
1.4% to C$47.6 billion in August, Statistics Canada reported Friday.
This is on the heels of a 3.0% advance in the month prior.

The gains resulted from higher sales in the transportation
equipment, food and petroleum and coal product industries. In constant
dollar terms (2002 constant dollars) sales climbed 1.1% again marking
the second consecutive monthly increase.

In August, 11 of the 21 industries recorded higher sales,
representing 70.0% of total manufacturing. From a provincial stand
point, Quebec, Newfoundland and Labrador and Ontario were the leading
contributors to the rise.

The transportation equipment industry saw sales surge 7.0% in
August, after jumping 3.5% in July. The gain was primarily associated to
increases in the aerospace product and parts, railroad rolling stock,
and ship and boat building industries, the agency reported. The rise was
moderated by declines in sales of motor vehicles and motor vehicle
parts.

After consecutive monthly decreases, sales in the food industry
increased for the first time in four months, rising 3.9% in August.
Sales in the petroleum and coal products industry also contributed
partially to the rise, advancing 2.7% to C$6.4 billion in August. This
was attributed to refineries reporting an increase in volumes as they
reopened after maintenance shutdowns in July.

The gains were offset by declines in the fabricated metal product
(-7.0%) and primary metal industries (-2.7%) in August.

Inventory levels edged up 0.3% to C$63.5 billion in August after a
marginal 0.1% increase in July. Following their recent lows in May 2010,
inventory levels have been trending upwards, but have been leveling off
in the past few months. In August, 12 of the 21 industries reported
higher inventory levels.

The gains were led by aerospace product and parts (+3.3%),
machinery (+1.9%) and food (+1.7%) industries. However, declines in
primary metal and computer and electronic product industries held back
the rise.

The inventory to sales ratio decreased from 1.35 in July to 1.33 in
August, falling for the second consecutive month.

Unfilled orders — orders which will contribute to future sales
assuming the orders are not canceled — increased for the eighth
consecutive time, rising 1.3% to C$60.3 billion. This was driven by
increases in the aerospace product and parts (+1.2%) and fabricated
metal product (+5.0%) industries.

New orders increased 0.8% to C$48.4 billion, after rising 1.2% in
July. The gains were once again led by new orders from the aerospace
product and parts, food and petroleum and cola product industries.

— Akhil Shah is a reporter with Need To Know News

** Market News International Ottawa **

[TOPICS: M$C$$$,MAUDS$,MACDS$]