Canada's manufacturing sales rose by 1.7 percent in January from December, less than expectations for a 2.0 percent jump in the Econoday survey of forecasters. Real sales increased 0.9 percent on the month. In year-over-year terms, nominal sales saw a 3.0 percent spike and declined by 2.1 percent in real terms.

Manufacturing sales were up due to a surge in motor vehicle sales, as a desire to stock up on inventory ahead of expected higher tariffs by the United States and operations resuming after planned winter shutdowns spurred demand.

Motor vehicle sales rebounded 11.1 percent in January, after a 4.7 percent decline in December, the largest month-over-month increase since March 2023. Sales of motor vehicle parts rose 5.8 percent in January.

Looking ahead, indicators are somewhat encouraging as new orders are up by 0.9 percent on the month and unfilled orders edged up 0.6 percent.

Inventories rose 1.2 percent, and the inventory-to-sales ratio dipped to 1.66 in January from 1.67 in December and versus 1.73 a year ago.

The unadjusted capacity utilization rate rose to 79.6 percent in January from a revised 75.9 percent in December and versus 77.3 percent in January a year ago.

Manufacturing sales rose in eight provinces in August, primarily in Alberta (+2.9 percent) and Ontario (+1.7 percent).

Manufacturing sales are seen up 2.0 percent in January, in line with the Stats Canada preliminary estimate, paced by accelerating sales of autos ahead of imposition of US import tariffs.

Manufacturing sales for twenty-one reporting industries are the Canadian dollar level of factory shipments for manufacturing durable and nondurable goods. Volume figures are also provided. The sales statistics form part of a wide monthly report that encompasses information on new orders, backlogs and inventories and is a key input into forecasts of monthly gross domestic product (GDP).

Manufacturer's shipments represent the monetary level of factory shipments for durable and nondurable goods and are a relevant indicator for an export-oriented economy. The data are used by analysts to evaluate the economic health of manufacturing industries. They are also used as inputs to GDP and needless to say, these data are used by the central bank in its decision-making process.

The monthly survey of manufacturing of which shipments is a part, provides a broad look at manufacturing activity levels. The level of activity in manufacturing can be affected by the level of interest rates which slows or stimulates the demand for goods and production. Shipments are an indication of how busy factories have been as manufacturers work to fill orders. The data not only provide insight to demand for items such as refrigerators and cars, but also business investment such as industrial machinery, electrical machinery and computers. Because a large proportion of shipments are headed south of the border to the U.S. and include a wide variety of durables, shipments are affected by U.S. economic activity as well as the exchange rate. Although the focus in this report is on shipments, it also contains information on inventories and new and unfilled orders.

Results from this survey are used by both the private and public sectors including finance departments of the federal and provincial governments, the Bank of Canada, Industry Canada, the System of National Accounts, the manufacturing community, consultants and research organizations in Canada, the United States and abroad.