Wood Sector Leads December Manufacturing Sales Slide

Manufacturing sales fell 1.5 per cent to $71 billion in December, the second consecutive monthly decrease, says Statistics Canada. Sales decreased in 14 of 21 industries, led by the petroleum and coal product (-6.4 per cent), wood product (-7.5 per cent), food (-1.5 per cent) and plastics and rubber (-4.0 per cent) industries. After increasing slightly in November, sales in the wood product industry fell 7.5 per cent to $3.3 billion in December, the lowest level since August 2020. Sales in constant dollars fell 3.1 per cent, indicating the decline was linked to lower prices and volumes. Prices for softwood lumber fell 8.9 per cent, the fifth consecutive monthly decline, while exports of lumber and other sawmill products declined 12.1 per cent. Higher interest rates in the U.S. coupled with lower construction activities resulted in lower demand for Canadian wood products. Compared with December 2021, sales in current dollars were down 16.9 per cent while on a quarterly basis, sales were down 7.3 per cent. Overall, manufacturing sales declined in eight provinces in December, led by Alberta, British Columbia, and Ontario. At the same time, total inventory levels edged up 0.1 per cent to $121.3 billion in December, mainly on higher inventories in the chemical (+4.0 per cent) and electrical equipment, appliance, and component (+8.4 per cent) industries. The gains were partly offset by lower inventories in the wood product (-4.2 per cent) and petroleum and coal product (-2.4 per cent) industries.