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Manufacturing sales falter in November

Manufacturing sales falter in November

Posted on: 1/24/2019 | Author: ATB Financial's Economics + Research Team

Alberta’s manufacturing sector took a hit in November, with monthly sales falling by 6.8 per cent compared to the previous month. Sales came in at $6.3 billion, almost catching up to the peak of $6.8 billion reached before the recession, not counting the effects of inflation. Sales figures are adjusted to smooth-out seasonal variations.

Last year was an up and down year for Alberta’s manufacturing sector. Sales fell in six out of 11 months, according to the data thus far available from Statistics Canada. Sales growth over the first 11 months of the year averaged 0.2 per cent. Average monthly sales, however, are well above where they were the previous year ($5.9 billion in 2017 compared to $6.4 billion in 2018).

Falling gasoline prices help explain the decline. Petroleum and coal product manufacturing sales (which includes gasoline) fell by 14 per cent in November. Sales for chemical manufacturing, the second largest sub-sector after petroleum and coal product manufacturing, fell by 9.3 per cent. Food is the third largest sub-sector. Its sales grew by 1.2 per cent.

Local demand for manufactured goods used in the oil and gas sector may be down, going forward, depending on drilling and other activity. This could dampen sales even further over the next few months. So, while sales have improved compared to 2017, the sector's growth could show further slowdown at the end of 2018 and into the first part of 2019.

Monthly manufacturing sales, Alberta, graph

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