Canada’s manufacturing sales rose by 1.7% in January, below the 2.0% estimate, while the previous month’s figure was revised from 0.3% to 0.5%. Wholesale trade increased by 1.2%, also short of the 1.8% expectation, with the prior month adjusted higher to 0.3% from -0.2%.
The capacity utilisation rate for the manufacturing sector improved from 75.9% in December to 79.6% in January. In the motor vehicle industry, sales surged by 11.1%, and petroleum and coal product sales increased by 4.7%, although chemical product sales declined by 7.4% to $5.0 billion.
Total Manufacturing Sales Growth
Total manufacturing sales saw a year-over-year rise of 3.0% in January. Eight provinces reported sales increases, with Ontario and Alberta posting notable gains; Ontario’s sales were up by 1.7% to $31.1 billion, largely due to motor vehicles and parts.
Alberta’s sales climbed by 2.9% to $9.0 billion, driven by growth in petroleum and coal products, as well as food, despite a decline in chemical products. Year-on-year, Alberta’s sales increased by 8.2%.
Conversely, Newfoundland and Labrador experienced a 26.9% drop in sales to $329 million, due to a 38.1% decline in non-durable goods. Yet, sales remained 11.7% higher year-over-year in January.
Total inventories rose by 1.2% to $121.2 billion in January, with raw material inventories increasing by 2.1%. Finished product inventories grew by 1.6%, while goods in process inventories slipped by 0.6%.
The largest inventory gains were in miscellaneous products (+29.1%) and aerospace products (+5.3%). The inventory-to-sales ratio slightly decreased from 1.67 in December to 1.66 in January, reflecting the second highest gain since 2023, potentially due to economic conditions in the US and expectations of future tariffs.
Manufacturing Sector Trends
These latest figures show hints of momentum in some areas while losses in others warrant caution. Manufacturing sales edged up by 1.7% in January, falling just short of forecasts, while December’s revised numbers depict a slightly better close to the year than initially thought. Gains in wholesale trade followed a similar pattern—growth, but not as much as expected. Adjustments to December’s data suggest that economic activity held somewhat firmer than the preliminary estimates implied.
The higher utilisation rate in manufacturing is notable. Businesses operated at 79.6% capacity in January, up from 75.9% the month before. It’s a clear indication that production ramped up after a slower December. The motor vehicle industry stood out in that regard, seeing an 11.1% sales jump, in part reflecting the ongoing rebound in auto manufacturing. Petroleum and coal products also contributed, with sales rising by 4.7%, though this was offset somewhat by the downturn in chemical products, which declined sharply by 7.4% to $5.0 billion.
Looking at annual trends, manufacturing sales posted a 3.0% gain over the previous year. Most provinces saw sales improve, with Ontario and Alberta leading the way. The former benefited particularly from autos and parts, while the latter was supported by the petroleum and food industries. Alberta’s yearly increase of 8.2% suggests a broader upswing in its manufacturing sector, despite lingering weakness in chemical products.
On the other hand, Newfoundland and Labrador struggled. Sales dropped by 26.9% in January, a decline that stems largely from non-durable goods, which plunged by 38.1%. However, in a year-over-year context, sales remained higher by 11.7%, showing that while January was rough, the broader trend is still intact.
Inventories tell another part of the story. Total stockpiles were up by 1.2% to $121.2 billion, with raw materials increasing at an even faster pace. Finished product inventories also rose, while goods in process saw a small dip. The largest build-ups came in aerospace and miscellaneous products, with jumps of 5.3% and 29.1%, respectively.
The inventory-to-sales ratio barely budged, ticking down from 1.67 in December to 1.66 in January. This was still one of the strongest increases since last year. Some of it likely reflects conditions south of the border, as economic trends in the US tend to spill over. Trade expectations—and in particular the potential for further tariffs—may also be shaping decisions around stock levels, as firms prepare for possible disruptions.
All of these figures provide a detailed view of how various sectors performed at the start of the year, with some industries seeing sharper movements than others. The underlying trends matter as they shape pricing, supply chain adjustments, and expectations in the weeks ahead.
