Q3 Industry Update - Canadian Manufacturing Sector
Manufacturing Sales Gain Momentum
Canadian manufacturing sales picked up steam in June, rising 20.7% on a month-over-month basis after growing 11.6% in May, according to Statistics Canada.
Motor Vehicles & Transportation lead
However, Canada’s manufacturing sales in June were still 13.2% below the pre-pandemic level recorded in February. June’s gains were led by a 281.6% jump in motor vehicle sales and a 190.3% increase in sales of motor vehicle parts as most transportation equipment plants returned to near-full production after the shutdowns. Sales also improved for petroleum and coal products which saw an increase of 31.5%. Almost every other industry in Canada’s manufacturing sector grew in June, with significant improvement in textile mills, and clothing and allied goods as well as aerospace products and parts.
Capital Spending is down
However, uncertainty stemming from the pandemic is causing manufacturers to reduce 2020 capital spending by an anticipated 18.5% compared to 2019. A reduction in capital spending could slow the recovery by reducing capacity utilization, and hurting demand for machinery and equipment used in manufacturing.
"Statistics Canada Says Manufacturing Sales Posted Record Gain in June"
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