The Conference Board of Canada Principal Economist, Eldar Sehic, offers insights on August manufacturing sales:
“With the onset of COVID-19, the already-struggling Canadian manufacturing sector suffered significant declines in March and April. Since then, manufacturing sales have strived toward recovery. However, the latest August decline signals that recovery will have to wait. Additionally, with the recent rise in COVID-19 cases across Canada, the sector will likely face more difficulties shaking off the effects of the pandemic.”
- The month of August saw manufacturing sales decrease by 2.0 per cent ($1.1 billion) month-over-month, following a 7.2 per cent ($3.6 billion) increase in July. The August decline was largely driven by transportation equipment (mostly motor vehicles and aerospace).
- Manufacturing sales stood 8.8 per cent ($5.1 billion) below the level seen in August of last year. The largest year-over-year declines were observed among petroleum and coal products (-37.7 per cent, or $2.3 billion) and transportation equipment (-16.0 per cent, or $1.8 billion).
- Some of the larger subsectors have been paving the way in terms of recovery, such as food and wood products—boosted by a strong rebound in consumer demand and a vigorous housing market.
- Motor vehicles sales partly recovered over the summer as North American households opted for their own vehicles to avoid health risks associated with commuter transportation.
- On the other hand, aerospace manufacturing has struggled and will likely remain troubled with the airline industry in limbo. Overall, we expect a slow recovery in total transportation equipment manufacturing, with real GDP not returning to pre-COVID-19 levels until 2023.
- With both employment and investment in the manufacturing sector held back by closures and low business confidence, the sector which makes up roughly a tenth of the economy is awaiting better days.