Manufacturing Sales Soar in October

Key insights

Rising manufacturing sales in October reflects the loosening of monetary policy in Canada. Higher motor vehicle sales drove much of the month’s growth. More favourable credit conditions and milder borrowing costs spell higher vehicle sales, which are normally purchased with credit. Although uncertainty looms on the horizon with Donald Trump’s tariff threat, looser monetary conditions are allowing manufacturing activity to continue its upward streak in November and sales growth likely followed. The S&P Global Canada Manufacturing Purchasing Managers’ Index rose to 52.0 in November from 51.1 in October. The index has remained above the 50.0 mark for three consecutive months, indicating the sector’s expansion.

Canada’s potential response to Donald Trump’s tariff threat is taking shape. The federal government is considering an export tax on high-demand commodities like oil, uranium, and potash to discourage Trump from moving forward with a proposed 25 per cent tariff on Canadian goods. The retaliatory measures would have negative implications for the economies of both Canada and the United States (as would Trump’s tariffs themselves). Any broad measures would almost certainly have disastrous consequences for manufacturing on both sides of the border. Some provincial governments, especially those that rely heavily on commodity exports, have indicated they would not support federal export taxes. The way forward isn’t set in stone. Raising the stakes could ward off a looming trade war. But words and confidence matter. Uncertainty over future business conditions is likely already incentivizing the migration of manufacturing operations to the U.S. and reducing investment prospects in Canada.

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