Manufacturing sales in Canada were up in July for a second continuous month, which has economists optimistic of a post-tariff recovery. Figures from Statistics Canada show that manufacturing sales rose 2.5 percent to $70.3 billion, thanks to the strength of the transportation equipment subsector, which grew by 8.6 percent to $11.4 billion.
On a constant dollar basis, manufacturing sales gained 1.6 percent month-over-month in July. This growth was supported by an 11.4 percent increase in the sale of motor vehicles and a 7.2 percent gain in motor vehicle parts. Aerospace products and parts also saw growth of 6.5 percent.
“The increases in manufacturing and wholesale sales in July suggest tentative signs of a recovery in two of the sectors hardest hit by U.S. tariffs,” said Thomas Ryan, North America economist at Capital Economics.
Two of the hardest hit subsectors of the economy by the tariffs seem to have moved through the worst of it, as primary and fabricated metals sales both saw increases of four percent month-over-month. Petroleum and coal products also saw 6.2 percent growth, bringing it to $7.2 billion, while wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons (excluding oilseed and grain) were up 1.2 percent to $86 billion. In terms of volume, wholesale sales, excluding those items, increased 0.8 percent in July.
While there is a sense of optimism, the recovery process will be slow, as total manufacturing sales were still down overall by 1.7 percent year-over-year.
