Canada’s manufacturing sector lost momentum in August as sales fell 1.0 percent to $69.4 billion due to declines in transportation equipment and food production.
Transportation equipment posted the steepest decline, down 5.7 percent to $10.7 billion. Aerospace products and parts tumbled 8.6 percent, reversing a record high in July, while motor vehicle parts fell 5.2 percent and assembled vehicles slid 3.3 percent. Exports of vehicles and parts also fell by nearly 5 percent.
Food manufacturing added to the weakness, dropping 1.9 percent to $12.9 billion in August, the second straight monthly dip. Real, or inflation-adjusted, sales in food were off 2.7 percent as volumes shrank in dairy, grain and oilseed milling.
Not all subsectors were down. Primary metals gained 3.6 percent to $5.8 billion, supported by a surge in alumina and aluminum products. Exports of unwrought aluminum and alloys soared 45.1 percent, providing a rare bright spot.
Sales fell in Quebec and Ontario. Quebec’s shipments declined 1.6 percent to $18.1 billion, with aerospace output sliding more than 10 percent. Ontario sales dipped 0.8 percent to $30.3 billion, almost entirely due to transportation equipment, although chemical products provided some lift with an 11.4 percent increase. Manitoba was the lone standout on the positive side.
Inventories rose 0.3 percent to $121.6 billion, the highest since late 2023 due to the finished products in the transportation equipment subsector. As a result, the inventory-to-sales ratio climbed to 1.75 months from 1.73 in July.
Unfilled orders also ticked up 0.3 percent to $112.8 billion, largely in aerospace, while its capacity utilization rate increased to 78.6 percent in August from 77.2 percent in July. Chemicals and transportation equipment posted the strongest gains in plant use, while petroleum and coal producers saw utilization fall.
For now, we can say manufacturing sales were down 1.0 percent in the first eight months compared with the same period last year, underlining the sector’s difficulty in regaining traction.