Manufacturing sales rose 4.1 per cent to $73.9 billion in January, with increases in 16 of 21 industries, reported Statistics Canada on Tuesday.
TD Economics
The petroleum and coal product (+10.1 per cent), motor vehicle (+13.4 per cent) and food (+3.4 per cent) industries led the increases, while the aerospace product and parts (-11.2 per cent), chemical (-2.8 per cent) and wood (-4.9 per cent) industries posted the largest declines, explained the federal agency.
It said sales in constant dollars were up 3.8 per cent in January, indicating that higher volumes played a significant role in the sales gain on a current dollar basis. The Industrial Product Price Index edged up 0.4 per cent in January.
“Following two consecutive monthly declines, sales in the petroleum and coal product industry increased 10.1 per cent to $10.3 billion in January, with prominent volume growth (+12.0 per cent). Prices for refined petroleum energy products (including liquid biofuels) rose 0.8 per cent in January, while exports were up 13.6 per cent. The increases were partly attributed to weather-related refinery disruptions in the United States. Compared with January 2022, sales increased 26.6 per cent,” said StatsCan.
Following a decrease in December, manufacturing sales in Ontario gained 5.2 per cent to $32.6 billion in January, led by the motor vehicle industry (+14.3 per cent). The increase in the motor vehicle industry accounted for slightly over one-third of the increase in the province, while lower production in the aerospace product and parts industry (-14.6 per cent) partly offset the increase. Compared with 12 months earlier, total sales in Ontario increased 18.3 per cent in January, said the report.
“In Alberta, sales reached a record high, rising 11.5 per cent to $9.7 billion in January following two consecutive monthly declines. The petroleum and coal product industry (+25.7 per cent) was the largest contributor to the increase, followed by the chemical (+17.3 per cent) and food (+5.8 per cent) industries. Year over year, sales rose 21.9 per cent in January.”
Marc Ercolao, Economist, TD Economics, said the Canadian manufacturing sector has started the year on strong footing after a sluggish end to 2022.
“The growth in manufacturing sales should continue into February as they continue to follow Canada’s manufacturing PMI which, after flipping into expansionary territory in January, is signaling healthy momentum into the next month,” he said.
“Stronger than expected manufacturing for the month of January should fuel some of the economic growth we expect in the first quarter of the year. Higher interest rates however, will continue to weigh on consumers, ultimately affecting the demand for manufactured goods – especially in the durables sector.”
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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