Canada’s manufacturing sector demonstrated robust performance in January, with total sales rising 1.7% to $73.0 billion, driven primarily by growth in motor vehicles and petroleum products.
Motor vehicle sales were a major contributor to the increase, rising 11.1% to $5.0 billion in January, and vehicle parts also saw a 5.8% increase, reaching $2.9 billion.
The petroleum and coal products subsector also saw a 4.7% rise in sales, reaching $8.7 billion. This marks the fourth consecutive monthly increase, driven by higher prices for refined petroleum products due to the demand for fuel in the cold weather in Canada and the United States.
While most sectors experienced growth, the chemical products subsector saw a significant drop in sales, falling 7.4% to $5.0 billion. Year-over-year, chemical product sales decreased by 10.8%.
Ontario and Alberta posted the largest gains in manufacturing sales, while Newfoundland and Labrador saw the steepest decline.
In Ontario, manufacturing sales rose 1.7% to $31.1 billion, largely due to strong motor vehicle sales. Ontario’s motor vehicle industry saw a 12.6% increase, the highest since November 2023. Sales of motor vehicle parts also rose by 6.1%. Year-over-year, motor vehicle sales in Ontario were up by 0.8%.
Alberta’s sales grew by 2.9% to $9.0 billion, the highest level since September 2023. This increase was driven by higher sales in the petroleum and coal products and food sectors, although chemical products saw a decline. Year-over-year, Alberta’s manufacturing sales were up 8.2%.
Meanwhile, Newfoundland and Labrador saw a sharp drop in manufacturing sales, falling 26.9% to $329 million. This decline was mainly due to a 38.1% drop in non-durable goods sales. However, compared to last year, sales in the province were still 11.7% higher.
Canada’s total manufacturing inventories rose 1.2% to $121.2 billion in January. The increase was driven by higher raw material and finished product inventories. In particular, inventories of aerospace products and food products saw significant growth.
Unfilled orders, which indicate future manufacturing activity, rose 0.6% to $107.3 billion in January. Aerospace products and parts saw the largest increase in unfilled orders, up 2.2%. However, the primary metal subsector experienced a decline in unfilled orders, down 5.2%.
The manufacturing capacity utilization rate, which measures the extent to which manufacturing plants are being used, rose from 75.9% in December to 79.6% in January. The largest increases were seen in the transportation equipment, primary metal, and petroleum and coal products subsectors. However, the non-metallic minerals subsector saw a decline in capacity utilization.
Looking ahead, the continued strength of Ontario and Alberta’s manufacturing sectors will be important for Canada’s economic performance. The overall year-over-year growth of 3.0% in manufacturing sales in January indicates that Canada’s manufacturing sector is well-positioned for steady growth in 2025.