Canadian manufacturing sales fell by a record 28.5 per cent to $36.4 billion in April, following a 9.8 per cent decline in March, according to a report released Monday by Statistics Canada.
“April marked the first full month of physical distancing measures in the wake of COVID-19 and manufacturing plants operated at limited capacity or ceased operations completely,” said the federal agency.
“Sales were down in all 21 industries, led by sharp declines in the transportation equipment and petroleum and coal product industries.
In volume terms, manufacturing sales fell by a record 26.0 per cent, indicating that a much lower volume of products was sold in April.
“Over four-fifths (85.2 per cent) of establishments in the manufacturing sector reported that their activities were impacted by COVID-19.”
The largest estimated impacts of COVID-19 on manufacturing sales in dollar terms were in the transportation equipment (-$4.9 billion), petroleum and coal product (-$1.6 billion), fabricated metal product (-$844 million), plastic and rubber product (-$831 million), food (-$811 million), machinery (-$783 million) and primary metal (-$710 million) industries, said StatsCan.
“Sales declined for the fourth consecutive month in the petroleum and coal product industry, falling by a record 46.4 per cent to $2.0 billion in April. The drop reflected lower prices and sales, as refineries curtailed production in response to reduced demand for energy products in April. The lower demand was due to an increase in remote work and a decline in commuting, which lowered energy consumption,” it said.
Overall manufacturing sales in Canada were down 37.1 per cent from a year ago.
In Alberta, sales fell in April by 19.6 per cent to $4.7 billion. They were down 30.4 per cent from last year.
“Expectations for April’s manufacturing data were already ugly, but the reading came in even worse than feared . . . With every Canadian assembly plant shuttered in April, motor vehicle manufacturing sales were virtually non-existent. Even the food industry took a notable hit after meat processing plants were shutdown due to outbreaks of COIVD-19 in factories. Overall, the capacity utilization in the manufacturing sector fell more than 16%pts to 56%, with inventories falling due to the lack of activity at the plants. Looking ahead, with many manufacturers resuming production in mid-May, sales should have bounced off of the lows plumbed in April. However, this is a much deeper hole than initially expected, and could take even longer for the sector to dig out of than initially expected,” said Royce Mendes, an economist with CIBC.
