Quick take

Wheels of industry slow as manufacturing sales dip in September

Share this page
Buildings
  • Canadian manufacturing sales fell by 3.0 per cent (m/m) in September. This was slightly better than Statistics Canada’s flash estimate of a 3.2 per cent decline. After accounting for price effects, manufacturing sales fell by 4.2 per cent.
  • Sales fell in 12 of the 21 industries. Sales of transportation equipment (-18.6 per cent) contributed most to the contraction. Meanwhile, sales of leather and allied products (+15.0 per cent) grew the most.
  • Manufacturing sales grew in only 2 of 10 provinces – Newfoundland (+6.1 per cent) and British Columbia (+0.2 per cent). Sales fell the most in New Brunswick (-7.4 per cent) and Prince Edward Island (-6.0 per cent).
  • September saw weaker sales in many transportation equipment subsectors. Both motor vehicle and aerospace manufacturing sales took a hit, though the former contributed the most to September’s decline.
  • New orders fell by 3.0 per cent, while unfilled orders grew by 0.6 per cent.

Key insights:

  1. You can’t go anywhere these days without hearing about supply chains, bottlenecks, and shortages. These disruptions are making life difficult for many Canadian manufacturers and are unlikely to go away any time soon. Shortages of key inputs and intermediate goods (including semiconductors) and shipping challenges are adding to the delays and slowdowns. These factors combined contributed to lower manufacturing sales in September.
  2. Motor vehicle production keeps slipping due to component shortages even as prices for new vehicles rise. For almost a year, transportation equipment has lost its lead as the largest manufacturing sales subsector. In September, wood product sales broke out of their nosedive, and food manufacturing and some primary materials subsectors showed signs of strength. But there is no counterbalance to offset the magnitude of the decline in motor vehicle sales. Next month won’t offer any respite for the sources of weakness in sales.
  3. It might get worse before it gets better. Negative supply-side drags on the economy will persist well into 2022. Weaker manufacturing sales will be a drag on near-term GDP growth. Statistics Canada’s preliminary estimate for real GDP in the third quarter calls for a 0.5 per cent increase but notes that September’s gains in other sectors were offset by a significant drop in manufacturing due to lower sales in transportation equipment.

COVID-19: Get all the insights

Kiefer Van Mulligen

Kiefer Van Mulligen

Economist

Media Contacts

For all requests, including reports and interviews, please contact: 

Deb Young
media@conferenceboard.ca

Taylor Gadde
media@conferenceboard.ca

Toll-Free
1-866-242-0075
(From 8 a.m. to 5 p.m. ET; after hours, please send an e-mail.)







Access our research

Access to the Conference Board’s reports is free of charge to professional journalists upon request.

Access our experts

Our experts are available to share research insights. Contact us.