In April 2024, Canada’s manufacturing sector witnessed a notable recovery with sales climbing by 1.1% to reach $70.8 billion, following a 1.8% decline in March. This resurgence was bolstered by increased sales across 12 of the 21 manufacturing subsectors. Key drivers of this growth included the transportation equipment, primary metals, and chemical products industries, which experienced gains of 4.1%, 4.7%, and 4.0% respectively. However, this positive trend was tempered by a significant 6.8% decline in the aerospace products and parts industry.
The transportation sector, particularly motor vehicles, played a significant role in the overall sales increase. After a sharp 7.9% drop in March, motor vehicle sales surged by 5.6% to $4.8 billion in April. This was accompanied by a 7.7% rise in motor vehicle parts sales. Despite some ongoing retooling at assembly plants, increased sales from certain manufacturers contributed to this uptick. However, on an annual basis, the sector still faced challenges with motor vehicle sales down by 1.4% and motor vehicle parts by 6.4%.
The primary metals subsector also saw substantial growth, with sales rising by 4.7% to $5.6 billion. This increase was largely driven by the non-ferrous metal production and processing industry, which experienced a remarkable 15.7% jump. The demand for precious metals, copper, and aluminum contributed to an 8.3% rise in non-ferrous metal product prices, the highest since March 2022.
In contrast, the aerospace product and parts industry saw a notable decrease in production, falling 6.8% to $2.3 billion. This decline followed a record high in March but was still 9.8% higher compared to the same period last year.
The increase in manufacturing sales was not uniform across Canada, with significant regional variations. Ontario and Alberta led the gains, with sales rising by 0.9% and 2.5% respectively. Ontario’s growth was primarily driven by a rebound in motor vehicle and parts sales, particularly in Windsor, which saw a 25.0% increase. Alberta’s gains were fueled by higher sales in the petroleum and coal, and chemical products subsectors.
Conversely, New Brunswick experienced the largest decrease, with sales dropping by 6.9% to $1.9 billion, marking the third consecutive monthly decline. This was mainly due to a decrease in non-durable goods sales.
Total inventories saw a slight decline of 0.2% to $120.8 billion, the lowest level since November 2022. This was due to reductions in goods-in-process and finished products, despite a slight increase in raw material inventories. The fabricated metal products subsector experienced the largest inventory decrease at 3.2%, while the transportation equipment subsector saw a 1.3% increase.
The inventory-to-sales ratio, which indicates the duration required to exhaust current inventories at the present sales pace, edged down from 1.73 in March to 1.71 in April, reflecting improved inventory turnover.
Unfilled orders rose modestly by 0.2% to $105.0 billion, reversing a 1.1% decline in March. This increase was largely driven by higher unfilled orders in the aerospace sector, indicating sustained demand and a growing backlog.
The capacity utilization rate for the manufacturing sector remained stable at 78.1% in April. Notably, the petroleum and coal and transportation equipment subsectors saw declines in capacity utilization, while the food and wood products subsectors experienced increases.