Sales slide as trade barriers hit key industries
Canada’s manufacturing sector recorded its sharpest monthly decline since late 2023, as US tariffs and growing global trade tensions weighed heavily on key industries, according to new data released by Statistics Canada (StatCan).
National manufacturing sales dropped 2.8% in April to $69.6 billion, the lowest monthly level since January 2022, a report from BNN Bloomberg noted. It marked the third consecutive monthly decline and the steepest since October 2023.
The downturn was largely driven by sharp decreases in petroleum and coal products (−10.9%), motor vehicles (−8.3%) and primary metals (−4.4%). StatCan noted that April was the first full month under a new wave of US tariffs, which have targeted Canadian steel, aluminum and automotive exports.
Growing global trade tensions in April were a major factor driving down prices and volumes in the petroleum and coal products industry, the agency noted in its release Friday.
The United States introduced the tariffs in March, but their full impact emerged in April. In response, Canada implemented its own countermeasures, though both countries have since introduced exemptions for goods complying with the Canada–United States–Mexico Agreement (CUSMA), along with relief for critical sectors.
Eight provinces experienced declines in manufacturing sales in April. Ontario, home to a significant share of Canada’s auto manufacturing sector, was particularly affected. Several assembly plants in the province scaled back operations amid tariff-related uncertainty.
Approximately half of manufacturers surveyed by StatCan reported being affected by the tariffs in some form during April, as did 43% of wholesalers.
In a separate report, StatCan said wholesale sales declined by 2.3%, with the motor vehicles, parts and accessories subsector seeing the sharpest drop. Businesses cited rising input costs, altered demand patterns, and pricing challenges due to tariffs as contributing factors.
StatCan previously reported that Canada posted a record $7.1 billion merchandise trade deficit in April, underscoring the widespread effects of the trade conflict.
CIBC senior economist Andrew Grantham said in a client note that both manufacturing and wholesale sales were weaker than expected. He suggested that StatCan’s preliminary estimate for a 0.1% increase in real GDP in April might be too optimistic.
According to Grantham, signs of lower inventories in the manufacturing data also bode poorly for April’s GDP figures.
Statistics Canada is set to release its official real GDP data for April on June 27.
