The Conference Board of Canada’s Senior Economist Richard Forbes offers the following insights on today’s manufacturing sales data:
Manufacturing sales declined 9.2 per cent in March, marking their largest monthly decline in over a decade. The results indicate that the pandemic has weighed heavily on manufacturers, as 17 of 21 industries reported reductions in manufacturing sales. Food and paper product manufacturing, however, posted unprecedented gains, reinforcing the belief that households have been stockpiling groceries and toiletries during the crisis
- Manufacturing sales declined by 9.2 per cent in March compared to the previous month, the largest monthly decline since the financial crisis.
- The decline in sales was broad-based, as 17 out of 21 industries reported reductions in manufacturing sales. Sales in the durable-goods sector contracted a sharp 13.1 per cent, while sales in the non-durable goods sector fell a more modest 4.9 per cent.
- Broken down further, sales in transportation equipment posted the steepest decline, falling 27.9 per cent. These results are consistent with the fact that many Canadian assembly plants and motor vehicle parts suppliers lowered production during the second half of March as a result of the COVID-19 crisis.
- In contrast, food and paper product manufacturing posted unprecedented gains, rising a combined 8.2 per cent. The results support the notion that demand for food and toiletries has risen sharply due to the pandemic.
- After taking into account price changes, total sales volumes fell 8.3 per cent in March.
- Regionally, sales fell in eight provinces, with Ontario and Quebec posting the largest declines. Meanwhile, Manitoba and Nova Scotia reported higher sales.
- This morning’s release reinforces our latest forecast which expects a sharp decline in the Canadian economy due to the COVID-19 crisis. We expect the Canadian economy to contract throughout much of the second quarter of 2020 before rebounding in the third quarter of the year.