Canada’s Manufacturing Sales Experience Biggest Drop Since 2023

Canada’s s manufacturing sales fell 2.8% in April, the biggest monthly drop since October 2023, as tariffs imposed by the U.S. hurt industry and demand.

Statistics Canada said manufacturing sales stood at $69.6 billion in April, their lowest level since January 2022 after a third straight monthly decrease.

Drops in sales of petroleum and coal products (down 10.9%), motor vehicles (down 8.3%), and primary metals (down 4.4%) led the decline.

Global trade tensions and tariff impacts were a major factor driving down prices and sales volumes in the energy sector, said Statistics Canada.

April marked the first full month of tariffs from the U.S. in many Canadian sectors, notably steel, aluminum, and the automotive industry.

The U.S. administration has since offered some carveouts from the tariffs for Canadian goods covered under existing trade agreements.

Canada’s federal government in Ottawa has also offered relief on some of its own counter-tariffs for businesses in critical manufacturing sectors.

Eight Canadian provinces saw manufacturing sales drop in April, but Statistics Canada said Ontario saw the biggest tariff-related impacts.

Several auto assembly plants in Ontario partially shutdown operations amid the tariff uncertainty during April.

Roughly half of manufacturers surveyed by Statistics Canada say they are being negatively affected by tariffs in some way.

Statistics Canada said price increases, changes in demand for products, and higher expenses for raw materials, shipping and labour were the most common impacts from tariffs.

The federal statistics agency also recently reported that Canada posted its largest merchandise trade deficit on record in April at $7.1 billion as exports fell sharply due to U.S. tariffs.