Reduced backlog of unfilled orders a concern

Almost one-half (48%) of manufacturers report their backlog of unfilled orders is lower than normal, Statistics Canada’s October Quarterly Business Conditions Survey indicates.

In comparison, only 40% of responding manufacturers reported lower than normal unfilled orders in July and 21% in October 2000.

As well, only 4% reported that the level was higher than normal, compared with 6% in July and 8% in October 2000. The -44 balance of opinion on unfilled orders was the lowest since the first quarter of 1992 (-51) and 10 points lower than in July 2001.

The greatest level of concern regarding the backlog of unfilled orders came from producers in four industries: transportation equipment, primary metals, paper and electrical and electronic products, Statistic Canada reports.

According to the Monthly Survey of Manufacturing, unfilled orders in August eased back 0.5% to $49.3 billion. Unfilled orders have generally been edging down since peaking in November 2000 at $50.9 billion.

There is also worry about orders received.

About 46% of manufacturers reported concern about declining orders received in October, compared with 41% in July and more than twice the level of 18% in October 2000.

This was largest proportion showing dissatisfaction with new orders since 48% so reported in March 1991.

Manufacturers in the primary metals, transportation equipment, and paper industries expressed the greatest level of concern about orders received.

The balance of opinion on the current level of orders received dropped to -41, 7 points lower than in the July survey.

The balance of opinion is determined by subtracting the proportion of manufacturers that stated their volume of production would likely be lower from the proportion who said their output would likely be higher.