Canada’s manufacturing sector saw a steady, increase in November 2024, marking a 0.8% rise in total sales to $71.5 billion. The growth followed a 2.1% increase in October and was driven by strong performances in the aerospace and petroleum industries. However, sales experienced a slight year-over-year decline, with overall manufacturing sales down by 0.4% compared to November 2023.
The standout performer was the aerospace product and parts industry, which saw a record-breaking 9.3% increase in sales, reaching $2.8 billion. The surge was driven by heightened production and a 9.0% rise in aircraft exports, engines, and parts. Over the past year, aerospace production has grown by an impressive 23.3%, showcasing the sector’s resilience in the face of global economic uncertainties.
Similarly, the petroleum and coal products subsector posted a 2.6% increase in sales, reaching $8.0 billion. It is the second consecutive monthly rise, fueled by the resumption of production in refineries following maintenance shutdowns. Exports of refined petroleum products also rose by 3.1%, although year-over-year comparisons showed a 2.1% decline in the subsector.
On the downside, sales in the motor vehicle parts subsector saw a significant 3.7% drop to $2.8 billion, reversing previous gains. Exports of motor vehicle engines and parts declined by 3.0%, reflecting ongoing problems in the global automotive supply chain. The decrease was one of the largest setbacks among the 21 subsectors in the manufacturing sector.
Regionally, Ontario and Quebec led the way in manufacturing growth. Ontario saw a 2.0% increase in sales, reaching $31.2 billion, with gains in 11 subsectors, including petroleum and fabricated metal products. This marked the third consecutive monthly rise for the province, although the 4.1% drop in motor vehicle parts sales dampened the overall performance. Despite these gains, Ontario’s manufacturing sales were down by 2.3% year-over-year in November.
Quebec also saw a modest 1.4% increase in manufacturing sales, reaching $18.4 billion. The province’s growth was primarily driven by a 12.4% increase in aerospace production, followed by a 2.7% rise in primary metals sales. Unlike Ontario, Quebec’s manufacturing sales grew by 2.3% compared to November 2023, indicating a more consistent upward trend.
The overall inventory level for manufacturers rose by 0.3% to $120.0 billion in November, largely due to higher inventories of finished products, which increased by 1.4%. Raw material inventories, however, saw a decline of 0.6%. The inventory-to-sales ratio, which measures how long it would take to exhaust inventories at current sales levels, slightly decreased from 1.69 in October to 1.68 in November, suggesting a more efficient inventory management approach.
Unfilled orders, an indicator of future manufacturing activity, also edged up by 0.3%, reaching $104.7 billion. This was primarily due to a rise in unfilled orders for machinery and fabricated metals. However, the aerospace products and parts subsector experienced a 1.1% decrease in unfilled orders, signaling potential delays in production or order fulfillment.
On a more concerning note, the manufacturing sector’s capacity utilization rate fell from 80.4% in October to 79.6% in November, with lower rates observed in 12 of 21 subsectors. The machinery, non-metallic minerals, and transportation equipment subsectors saw the most significant drops, indicating that many manufacturers were not operating at full capacity. However, the primary metal, petroleum, and coal products sectors showed slight improvements, highlighting areas where demand remained robust.
The depreciation of the Canadian dollar, which fell 1.6% against the US dollar from October to November, played a role in the performance of several manufacturing subsectors. The weaker Canadian dollar benefited businesses, dealing in US dollars, especially those in transportation equipment and primary metals, where exports form a significant portion of sales.
While the manufacturing sector experienced modest growth in November, challenges remain, particularly in the motor vehicle parts and machinery subsectors. The continued fluctuations in global demand, coupled with supply chain disruptions and fluctuating currency values, suggest that manufacturers will need to navigate a complex economic landscape in the coming months.
Looking ahead, Canadian manufacturers will focus on innovation and efficiency to remain competitive, especially as external factors like currency exchange rates and global demand patterns continue to influence the industry’s trajectory. In 2025, the hope is that the diverse subsectors can continue their growth trends while addressing the challenges that remain on the horizon.