Aerospace Products Lifted Manufacturing Sales in May

Key insights

Building on a gain in April, Canadian manufacturing sales increased slightly in May. Sales of aerospace products were a key contributor to month-over-month growth, expanding by 11.2 per cent (in dollar terms). Real sales of aerospace products have slowly but steadily recovered since their collapse at the outset of the pandemic, and, after May’s gain, are inches from surpassing their pre-pandemic level. Statistics Canada noted that nominal aerospace sales are at their highest level on record. However, declining sales of manufactured motor vehicles (which fell by 1.6 per cent in nominal terms) offset some of the strength in the transportation equipment subcategory. Retooling activity at an auto assembly plant in Ontario was the primary culprit behind this drop.

The impasse on Canada’s railroads still looms over the manufacturing sector. In late June, nearly 10,000 workers of the Teamsters Rail Conference voted to reconfirm potential strike action as negotiations with the CN and CPKC railroads remain at a standstill. However, the possibility of labour action awaits the decision of the Canada Industrial Relations Board (CIRB), which will determine whether a strike would jeopardize Canadians’ health and safety. The timing of the decision remains unknown, though many manufacturers remain concerned that a near-term strike would negatively impact operations. Food manufacturing, for example, could be harmed if freight transportation isn’t available at harvest time. Many manufacturing subsectors are also trade-dependent, requiring reliable rail transportation. As the CIRB’s decision looms, the lack of certainty over when a potential strike could occur could also damage domestic and international confidence in Canadian supply chains.

For more details about Canadian manufacturing and industrial trends, please explore our Industry Lens reports.