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Aug 17, 2022

Wood Products Lead Manufacturing Sales Decline

Following a 1.1 per cent decline in May, manufacturing sales fell 0.8 per cent to $71.8 billion in June, on lower sales in eight of 21 industries, led by the petroleum and coal product (down 7.8 per cent), wood product (down 7.2 per cent), and aerospace product and parts (down 16.8 per cent) industries. Meanwhile, sales of motor vehicles (13.8 per cent) and chemical products six per cent) increased the most. Wood product sales fell 7.2 per cent to $3.9 billion, the third consecutive monthly decline, mainly on lower sales of sawmills and wood preservation products (19.1 per cent). Consequently, sales of wood on a quarterly basis fell 6.3 per cent. Prices of softwood lumber declined 28 per cent in June, the largest monthly decline since July 2021 (32.9 per cent), while exports of forestry products and building and packaging materials fell 6.6 per cent. Lower construction activities in the United States resulted in declines in demand for Canadian wood products, while the total value of building permits in Canada decreased 1.5 per cent in June. Manufacturing sales declined in eight provinces in June, led by New Brunswick, Quebec, and Alberta. Meanwhile, Manitoba and Ontario posted increases. On a quarterly basis, sales rose 5.8 per cent in the second quarter, the eighth consecutive quarterly gain and the third largest gain in dollars on record. Total inventory levels increased 2.1 per cent to $116.4 billion in June, mainly on higher inventories in the machinery, transportation equipment, and chemical product industries. Raw materials, representing the largest component of inventories, have been trending upward for 20 consecutive months due to higher prices. Year over year, total inventories rose 27.7 per cent.

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