Manufacturing Sales Drop in August though September’s PMI Picked Up
- Canadian manufacturing sales fell by 1.3 per cent (m/m) in August. This was a slightly more modest decline than anticipated in Statistics Canada’s flash estimate which called for a 1.5 per cent drop. After accounting for price effects, real manufacturing sales volumes fell by 0.8 per cent (m/m).
- Nominal sales grew in 9 of the 21 manufacturing subsectors. Sales of wood products (+$113 million) rose the most. Meanwhile, sales of primary metal products (-$358 million) saw the sharpest decline.
- Manufacturing sales grew in only 2 of the 10 provinces. In relative terms, sales fell the most in Newfoundland and Labrador (-12.3 per cent) and grew the most in Prince Edward Island (+2.3 per cent).
- New orders declined by 2.4 per cent, while unfilled orders decreased by 0.7 per cent.
Key Insights
After expanding in July, manufacturing sales fell in August. The decline was driven by lower sales of primary metals, petroleum and coal products, and transportation equipment. Sales of manufactured wood products, however, posted a notable month-over-month gain. Within the transportation equipment category, sales weakness was felt unevenly as aerospace product sales expanded to their second-highest level on record. Between January and August 2024, sales of aerospace products grew by 20.0 per cent compared to the same period in 2023.
Brighter days are ahead for Canada’s manufacturing sector. September’s Purchasing Manager’s Index rose to 50.3 per cent from 48.5 per cent in August. This reading is the first above 50 since April 2023, which marks the first time since early 2023 that, according to this indicator, the manufacturing sector expanded. As the Bank of Canada makes monetary policy less restrictive, manufacturing activity will grow further. Changes in the U.S. government following November’s election, however, could jostle Canada’s manufacturers if a new administration secures a mandate supportive of greater protectionism.
For more details about Canadian manufacturing and industrial trends, please explore our Industry Lens reports here.
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