Manufacturing Sales Drop in September Leads to Fourth Consecutive Quarterly Decline

Key Insights

Manufacturing sales fell for a second consecutive month in September, weighing on sales in the third quarter of 2024 overall. Lower sales of petroleum and coal were the largest driver of the drop in September. Lower energy prices were partly to blame, though weak global demand for energy also played a role. Excluding these products, manufacturing sales grew by 0.4 per cent. Looking ahead, the S&P Global Canada Manufacturing PMI rose to a 20-month high in October and remained above 50, signalling an expansion of manufacturing activity. Sales will pick up in the months ahead as the Bank of Canada loosens monetary policy and demand for manufactured goods increases.

The re-election of Donald Trump in the United States has a range of implications for Canadian manufacturing. How aggressively Trump’s administration will act on some of the policy proposals raised during his campaign is uncertain. Yet, some general directions are clear. Protectionism has a full-throated mandate, and President-elect Trump will pressure Canadian exporters with tariffs—or, at least, the threat of tariffs. The Canada-United States-Mexico Agreement, which replaced NAFTA in 2018, will expire in 2026. Renegotiating a new agreement could result in less favourable terms for Canadian manufacturing, reflecting a shift to a more transactional approach to international relations in the United States. The new deal could even exclude Mexico, which could interfere with manufacturers operating in all three countries. Canada’s large bets on electric vehicle (EV) manufacturing also face the risk of a cooler attitude toward the transition to EVs in the United States

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