Canada Factory Shipments Fall 2.1% in March

By Robb M. Stewart

OTTAWA--Canadian manufacturing was again in decline in March as shipments of petroleum and motor vehicle both fell sharply, pulling factory sales down by the most in five months.

Manufacturing sales declined 2.1% from the month before to a seasonally adjusted 69.88 billion Canadian dollars, the equivalent of about $51.19 billion, Statistics Canada said Wednesday.

The pullback was softer than the data agency's advance estimate for a 2.8% fall for the month and follows an upwardly revised 0.9% increase in February sales.

Sales in constant dollars were 2% lower for the month at C$55.08 billion, an indication the volume of goods dropped and a further sign of a softer economic backdrop at the end of the first quarter.

For the first three months of the year, manufacturing sales fell 0.9%, due largely to a decline in transportation equipment and primary metals, after a drop of 1.7% in the final quarter of last year.

Industry-level gross domestic product expanded in the first two months of 2024, though early indications suggest growth flattened in March as declines in manufacturing and retail trade offset increases in utilities and real estate, rental and leasing.

A drag from motor vehicle shipments as some manufacturing plants were retooling for new models also affected wholesale trade in March, helping drive a 1.1% drop in sales from the month before to C$81.41 billion, data released Tuesday showed. In volume terms, wholesale sales were down 2.1% on-month.

Canada's manufacturing sector has struggled for much of last year. S&P Global's Canada manufacturing purchasing managers' index has been in contraction territory for 12 consecutive months, with a subdued performance in April as the measure weakened slightly to a three month low of 49.4 from 49.8 the previous month.

Statistics Canada's manufacturing survey showed petroleum and coal sales were down the most of any sector in March, declining 8% after a rise of 5.7% the month before. Prices for refined petroleum products rose for a second straight month in March but exports were down 5.8%.

On a quarterly basis, petroleum and coal sales edged down 0.3% in the first quarter.

After increasing the previous two months, sales in the motor vehicle industry were 7.9% lower and vehicle parts sales were down 2.8%. Ongoing retooling at several big assembly plants in the province of Ontario continued to dent manufacturing levels and also weighed on exports for the month.

Excluding motor vehicles, parts and accessories, manufacturing sales were down 1.7% in March from the month before.

Partially offsetting manufacturing weakness, sales of machinery were up for the month after declining three consecutive months.

Inventory levels held by factories were largely unchanged in the latest month after falls the previous three months, though were 2.2% lower than a year earlier, the agency said.

Unfilled orders, the stock of orders that will contribute to future sales if they aren't canceled, weakened 0.8% for the month following increases for three months running and new orders declined 4.7% from February.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

05-15-24 0854ET