The following is the text of Canada's manufacturing shipments report for August released by Statistics Canada.

Manufacturing sales rose 1.4% to $47.6 billion in August, the highest level since October 2008. The gains were concentrated in the transportation equipment, food, and petroleum and coal product industries.

Constant dollar manufacturing sales were up 1.1%, the second consecutive increase.

Higher sales were reported in 11 of 21 industries, representing 70.0% of total manufacturing. Quebec, Newfoundland and Labrador, and Ontario led the provincial increases.

Manufacturing sales rise in August for a second consecutive month

Transportation equipment industry leads the advances

Sales of transportation equipment rose 7.0% in August, following a 3.5% gain in July. The gain in August was associated with increases in the aerospace product and parts, railroad rolling stock, and ship and boat building industries. These gains were partially offset by declines in sales of motor vehicles and motor vehicle parts.

In the food industry, sales increased 3.9% in August, the first increase in four months. Advances were widespread in the industry.

Sales in the petroleum and coal products industry rose 2.7% in August to $6.4 billion. A portion of the increase reflected higher volumes reported by some petroleum refineries following maintenance shutdowns in July.

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

Manufacturing sales rise in most provinces

Manufacturing sales rose in eight provinces in August, with Quebec, Newfoundland and Labrador, and Ontario reporting the largest provincial sales increases in dollar terms.

In Quebec, manufacturers reported a 3.5% increase in sales to $11.8 billion. The aerospace product and parts, the food, and the petroleum and coal product industries were the main contributors to the increase.

Sales rose 53.6% to $397 million in Newfoundland and Labrador, reflecting substantial gains in the non-durable goods industries. The increase in August is the largest since June 2009.

Manufacturing sales in Ontario increased 0.4% to $21.5 billion in August as advances were reported in 13 of 21 industries. The largest gains occurred in the aerospace product and parts, food, and miscellaneous industries. These gains were largely offset by declines in the primary metal, motor vehicle, fabricated metal product, and motor vehicle parts industries.

Sales declined 5.6% in Nova Scotia and 2.4% in Manitoba, the only provinces with decreases.

Modest gains in inventory levels

Inventory levels edged up 0.3% to $63.5 billion in August. Inventory levels were trending upwards after their recent low in May 2010 but have levelled off over the past few months. In August, manufacturers in 12 of 21 industries reported higher inventory levels.

The inventory gains were led by the aerospace product and parts (+3.3%), machinery (+1.9%), and food (+1.7%) industries. These gains, however, were mostly offset by declines in the primary metal and computer and electronic product industries.

Modest gains in inventory levels

The inventory-to-sale ratio declined from 1.35 in July to 1.33 in August, the second consecutive monthly decrease. The inventory-to-sales ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

The inventory-to-sales ratio declines

Unfilled orders advance for the eighth consecutive month

Unfilled orders rose 1.3% to $60.3 billion in August, their highest level since April 2009. The largest contributors to the gain were the aerospace product and parts (+1.2%) and fabricated metal product (+5.0%) industries.

Unfilled orders up eight consecutive months

New orders rose 0.8% to $48.4 billion in August. There were gains in new orders from the aerospace product and parts, food, and petroleum and coal product industries. However, these were offset by declines in orders in the machinery, fabricated metal product, and primary metal industries.

Note to readers

All data in this release are seasonally adjusted and are expressed in current dollars unless otherwise specified.

Preliminary data are provided for the current reference month. Revised data, based on late responses, are updated for the three previous months.

Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.

Durable goods industries include wood products, non- metallic mineral products, primary metal, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.

Production-based industries

For the aerospace industry and shipbuilding industries, the value of production is used instead of sales of goods manufactured. This value is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured.

Unfilled orders are a stock of orders that will contribute to future sales assuming that the orders are not cancelled.

New orders are those received whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month.