Petroleum and Coal Shipments Stoked Manufacturing Sales in July

Key Insights

Manufacturing sales rebounded partially in July after a notable decline in June. Sales of chemical, petroleum and coal products contributed the most to overall growth. The expansion of petroleum and coal sales helped Saskatchewan’s manufacturing sales growth to top the chart in July. Sales of non-durable goods (+2.7 per cent) were far stronger than sales of durable goods (+0.1 per cent). Statistics Canada noted wood product sales reached their lowest level since May 2023, driven down by weaker demand and falling lumber prices. Recent mill closures in British Columbia will likely compound wood product sales weakness.

Tariffs on Chinese electric vehicles (EVs), steel, and aluminum will have mixed impacts on Canada’s manufacturing sector. By raising the cost of imported Chinese-made EVs in Canada, these measures will support the development of domestic battery and EV production. However, if the supply of affordable EVs in Canada is constrained by this action, the pace of EV adoption could slow. The tariffs could also disrupt supply chains for some manufacturers as they search for cheaper alternative sources of steel and aluminum in the short term. In response, China announced that it would conduct an anti-dumping investigation into Canadian canola, which could impact the domestic agriculture and food manufacturing sectors. The already-announced tariffs may also be followed up with additional measures on Chinese semiconductors and batteries, which could escalate trade tensions.