Canada's Manufacturing Sales Edge Up 0.1% in June, Surpassing Forecasts

Canadian manufacturing sales saw a slight increase of 0.1% in June, reaching $78.8 billion. This figure exceeded economists' projections for a 0.1% decline and represents the fifth consecutive month of growth for the sector. The previous month had registered a more robust 1.3% expansion. On an annual basis, sales were up 14.5%.

Excluding the volatile petroleum and coal product segment, sales demonstrated a significantly stronger performance, rising by 2.6% month-over-month. When adjusted for price changes, constant-dollar sales increased by 1.2%, indicating that the underlying volume of goods sold was firmer than the nominal headline figure suggested. For retail forex and CFD traders, these manufacturing reports offer insights into the health of the Canadian economy, potentially influencing the Canadian dollar (CAD) against other major currencies.

Inventory levels also contributed to the overall picture, with manufacturing inventories expanding by 0.6% in June to $126.8 billion. Over the second quarter, inventories grew by 2.0%, with goods in process seeing a 2.0% rise.

Subsector Performance Highlights

• The chemicals subsector experienced a 6.0% increase, reaching $6.3 billion, marking its fourth straight gain and highest level since October 2022.
• Transportation equipment sales grew by 2.8% to $12.4 billion, continuing a five-month upward trend, bolstered by a 6.2% rise in motor vehicle parts and a 6.0% increase in aerospace products and parts.
• Conversely, petroleum and coal product sales declined by 14.1% to $10.1 billion, primarily due to lower energy commodity prices.

Looking at the second quarter of 2023, manufacturing sales surged by 9.3% to a record $235.1 billion, marking the fourth consecutive quarterly increase. This quarterly strength was broad-based, with petroleum and coal products up 33.7%, transportation equipment rising 14.7%, and non-petroleum and coal sales increasing by 6.1%. Constant-dollar sales for Q2 also showed solid growth of 4.6%. These figures provide a comprehensive view of the manufacturing sector's contribution to Canada's economic output.