Data released on Monday showed a larger-than-expected decline in April in manufacturing sales in Canada. Stephen Brown, Senior Economist at Capital Economics points out the manufacturing sector is struggling due to supply shortages.
“Manufacturing sales volumes slumped 3.3% m/m in April, as the disruption from the global semiconductor shortage intensified. While sales volumes should gradually rise again from May, it will be some time before overall manufacturing activity returns to its pre-pandemic level.”
“The 2.1% m/m fall in manufacturing sales values in April was twice as bad as the preliminary estimate. The weakness was primarily due to the disruption from the global semiconductor shortage, with sales of motor vehicles plunging by 36% m/m and sales of parts falling by 19%. The shortages also help to explain the smaller declines in computer & electronic product and electrical equipment & appliance sales.”
“The upshot is that manufacturing activity is likely to remain somewhat depressed. Manufacturing sales volumes were 6.6% below their pre-pandemic level in April, although sales values have at least been supported by the strong gains in commodity prices this year. In any case, with activity elsewhere in the economy set to recover strongly in the coming months as the coronavirus restrictions are eased, we continue to expect overall GDP to return to its pre-pandemic level by August or September.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.