Manufacturing sales fall 2.8 per cent in April, biggest monthly drop since 2023

Statistics Canada says manufacturing sales fell 2.8 per cent in April, the largest monthly drop since October 2023, as the tariff dispute with the United States hit the industry.

The agency says manufacturing sales stand at their lowest level since January 2022 after a second straight monthly drop.

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

"Manufacturing and wholesale sales were both weaker than expected in April, suggesting monthly GDP may also be revised lower relative to its first estimate," wrote Andrew Grantham, senior economist at CIBC Capital Markets.

While the trade war kicked off in March, April marked the first full month of tariffs from the United States in many sectors — particularly targeting Canada's steel, aluminum and automotive industries.

Roughly half of manufacturers surveyed by Statistics Canada say they were being affected by tariffs in some form in April, as did 43 per cent of wholesalers.

A separate release from Statistics Canada says wholesale sales fell 2.3 per cent in April, with the motor vehicles parts and accessories subsector leading the drop.