Canada Factory Sales Estimated Down Slightly in July After Five Straight Months of Growth

By Robb M. Stewart

OTTAWA--Factory activity in Canada weakened last month, with an early estimate pointing to the first drop in sales in six months.

The value of manufacturing shipments edged down an estimated 0.2% in July from a month prior, Statistics Canada said Monday.

The largest declines were in chemicals and fabricated metal products, the data agency said.

The slowdown comes after factory trade inched up 0.1% in June, with increased sales of chemicals and transportation equipment more than countering a drop in petroleum products with a pull back in prices. In volume terms, manufacturing sales rose 1.2% in June.

Factory activity in Canada had been building as the economy has recovered and exports rebounded following the hit to sentiment and demand caused by the shift last year in U.S. trade policy and tariffs. That uncertainty is expected to remain heightened after trade talks between Ottawa and Washington collapsed.

Manufacturing sales rose 9.3% over the second quarter of the year to the highest level on record, a fourth consecutive quarterly increase. Sales volumes for the quarter were up 4.6%, led by transportation equipment, helping drive growth in the economy following back-to-back quarterly contractions in gross domestic product.

Statistics Canada's sales projection for July was based on a weighted response rate to its monthly survey of roughly 70%. The official survey results, based on more complete data, are scheduled to be released Sept. 14.

S&P Global's Canada manufacturing purchasing managers index rose in July to the highest in four years as increased domestic activity made up for faltering international demand. The index advanced to 53.5 for the month, signalling a fourth straight month of expansion for the country's manufacturers after a reading of 53 in June.

Statistics Canada is set to release official gross domestic product data for the second-quarter on Friday, as well as a forecast of industry-level GDP for July. Economists expect 3.5% annualized growth for the latest quarter, after GDP inched down 0.1% over the first three months of 2026.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

August 24, 2026 08:49 ET (12:49 GMT)