Canadian Manufacturing

Manufacturers gain ground in June, but growth figures fail to impress

Chemical products, autos lead modest growth in factory sales



OTTAWA—Some windfall from the lower loonie may finally be reaching Canadian manufacturers, but the modest growth – relative to Canada’s 6.3 per cent June export surge – is likely to disappoint those awaiting the country’s industrial renaissance. The industry added 1.2 per cent in sales in June to reach $50.8 billion, according to Statistics Canada, and recorded its second consecutive gain.

Though sales are still down 1.5 per cent year-to-date versus the same period in 2014, constant-dollar sales for June increased 0.5 per cent, indicating manufacturers are moving a higher volume of goods.

“Sales increased in 18 of 21 industries in June, representing 80 per cent of the manufacturing sector. Higher sales of chemical products and motor vehicles led the gains. Lower sales of fabricated metals partly offset the advance,” Statistics Canada said.

Chemical products advanced 5.4 per cent, despite the usual May product peak, and auto vehicle sales rose 4.2 per cent to $4.9 billion, marking the third increase for the industry since the beginning of the year. Year-to-date auto sales are “at their highest level since 2007, the year before the industry reported significant losses as a result of the recession,” the agency noted.

Sales of fabricated metal products weighed on overall Canadian manufacturing growth, however, falling 8.2 per cent.

“In June, some manufacturers tied to oil and gas extraction reported lower sales after finishing some long-term contracts in previous months,” Statistics Canada noted, explaining some of the decline.

The manufacturing sales gains were widespread through June, with seven provinces recording increases. Quebec posted the largest sales gain, followed by Alberta and Ontario, while declines in New Brunswick partially offset the growth.

Sales in Quebec increased 2.9 per cent to $12.4 billion, partially higher production of aerospace products and parts. And for a second consecutive month, sales rose in Alberta, increasing 1.9 per cent. Ontario, which had experienced two consecutive decreases, saw sales rise 0.4 per cent to $23.5 billion. Statistics Canada said motor vehicle sales were mainly responsible for the growth.

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