On a quarterly basis, sales were up 1.4% in the first quarter of 2023, mostly due to higher sales in the transportation equipment industry. PHOTO courtesy TRUMPF.
Following a 3.6% decline in February, Canadian manufacturing sales increased 0.7% to $72.3 billion in March, led by the motor vehicle (+8.6%) and aerospace product and parts (+18.8%) industries, two of the most industries for Canada’s metalworking job shops.
Primary metal sales also showed a strong (+4.6%) increase. Fabricated metal product sales were down 2.1% for the month but still showed a 5.1% increase year-over-year.
The economic performance data is from Statistics Canada’s monthly Survey of Manufacturing.
Sales in constant dollars rose 1.1% in March from the previous month, indicating that a higher volume of goods were sold in March. On a quarterly basis, sales were up 1.4% in the first quarter of 2023, mostly due to higher sales in the transportation equipment industry. The positive manufacturing sales for the first quarter contradict predictions of a slowdown in the economy and a looming recession which have now been in circulation since the fall of last year.
Motor vehicle sales post largest increase
Following an 11.8% decline in February, motor vehicle sales increased 8.6% to $4.7 billion in March. With the gain in March, sales stood 19.9% higher year over year, while on a quarterly basis sales increased 17.9% in the first quarter of 2023, Statistics Canada reports. Canadian auto manufacturers sold nearly 150,000 motor vehicles in March, the most since November 2019.
“While the industry saw a reduction in supply chain volatility and shortages of semiconductor chips in the first quarter of 2023 compared with the same quarter a year earlier, higher cost of raw materials and higher interest rates impacted prices and demand for new motor vehicles,” Statistics Canada stated in its report. It added that the average prices of motor vehicles manufactured in Canada were over 20% higher in March compared with the same month a year earlier.
Production of aerospace product and parts increased 18.8% to $2.1 billion in March, the highest level since March 2020. Production in the first quarter of 2023 was up 8.3% accordingly, Statistics Canada noted. Some major aerospace companies reported positive net income along with higher revenues and profit in the first quarter due to delivery of multiple aircrafts and sales of other aerospace products and parts.
Sales of primary metals rose 4.6% to $6.0 billion in March on higher prices and volume. Sales rose in all the primary metal industries, but increases were more pronounced in the non-ferrous metal (except aluminum) production and processing industry (+44.5%). Sales of primary metals in real terms were up 3.8% in March.