Report details Covid’s initial impact on manufacturing
- January 18, 2022
The final tally is in for the impact on Canadian manufacturing during the first year of COVID-19 and, as expected, it’s pretty grim.
In a report released today, Statistics Canada calculated the total revenue loss at 9.3 per cent, representing a drop of $69.8 billion in 2020. This followed four years of consecutive annual increases.
The $678.4 billion in sales generated in 2020 was just over the $665.0 billion recorded in 2016.
Revenue from goods manufactured, which represents 94% of total revenue, fell 9.8% (-$69.2 billion) to reach $635.1 billion in 2020—a decrease in 17 of the 21 manufacturing subsectors. Transportation equipment, petroleum and coal product, machinery and primary metal manufacturing contributed $62.9 billion to the annual decrease, partially offset by the combined $7.6 billion increase in food and wood product manufacturing.
Transportation equipment manufacturing was particularly hard hit during the start of the pandemic. Transportation equipment recorded a 21.6% (-$29.9 billion) annual drop in revenue from goods manufactured to reach $108.4 billion in 2020, and was impacted greatly by plant shutdowns in Canada and reduced domestic and international demand.
All transportation industries, except ship and boat building, were down. Automobile and light-duty motor vehicle manufacturing accounted for 52% of this decrease, followed by aerospace product and parts manufacturing, with 15%.
Automobile and light-duty motor vehicle manufacturing decreased by 26.7% (-$15.5 billion) in 2020, following a 2.9% (+$1.6 billion) increase in 2019. Shutdowns of assembly plants from March 2019 to May 2020, along with significant decreases in exports of passenger cars & light trucks, were top contributing factors.
These shutdowns caused a significant decline in the demand for motor vehicle parts in 2020, and by consequence, motor vehicle parts manufacturing fell 19.9% (-$6.6 billion) to $26.8 billion.
Aerospace product and parts manufacturing declined by 17.0% (-$4.3 billion) to reach $21.2 billion in 2020, mainly because of worldwide travel restrictions and lower demand for aircraft and other transportation equipment and parts exports.
For machinery, revenue from goods manufactured fell 10.9% (-$4.4 billion) to $36.0 billion in 2020, following a 5.8% annual increase in 2019. All industries were down, except ventilation, heating, air-conditioning and commercial refrigeration equipment (+1.1% or +$47.3 million) and agricultural implement manufacturing (+0.9% or +$32.4 million). Both these industries were in higher demand during the pandemic.
As would be expected, primary metals also took a hit as demand for Canadian iron and steel decreased with the drop in manufacturing levels.
Primary metal manufacturing experienced declining revenue from goods manufactured, decreasing by $4.1 billion (-8.3%) to $45.0 billion in 2020. Iron and steel mills and ferro-alloy manufacturing, as well as iron and steel pipes and tubes manufacturing, accounted for 64% ($2.6 billion) of this decline.
The domestic demand for the commodity was affected by declines in the transportation, fabricated metal and machinery manufacturing industries. Canadian steel and iron product exports to the U.S. decreased by 12.0% in 2020, despite the lifting of tariffs in 2019.