Canadian manufacturing sales in March slumped by the most in more than 11 years as the coronavirus pandemic forced the shutdown of many firms, and April looks set to be worse, Statistics Canada data indicated on Thursday.
Statscan said sales plunged by 9.2 per cent, the greatest fall since December, 2008, during the great recession. Analysts in a Reuters poll had forecast a drop of 5.7 per cent in March.
Of the 21 industries monitored by the statistical agency, 17 reported declines.
“The economic data will also likely get significantly worse in April and with more spillover to the goods side of the economy with containment measures in place for the entire month,” said Nathan Janzen, a senior economist at RBC Economics.
The Canadian dollar weakened to a one-week low of 1.4120 to the U.S. greenback, or 70.82 U.S. cents.
More than three-quarters of firms in the manufacturing sector said their activities had been affected by shutdowns.
“Given ongoing lower demand, together with continued challenges to global supply chains and ongoing physical distancing measures, the March decline in sales is expected to continue into April,” Statscan said in a commentary.
Sales in the transportation equipment industry sank by 26.5 per cent, pulled down by a 33.8-per-cent crash in sales of motor vehicles. Sales declined for the third consecutive month in the petroleum and coal product industry, plunging 32.2 per cent.
“Looking at the manufacturing numbers for March, which overall might have seen less of an impact than other sectors, suggests that there will only be pockets of the economy which have avoided feeling the pain of COVID-19,” CIBC senior economist Royce Mendes said in a note.
Some industries benefitted as shoppers rushed to the stores. Sales of paper expanded by 8.4 per cent while food sales grew by 8.2 per cent, followed by beverage and tobacco, up by 6.7 per cent.
“The gain in the paper industry largely reflected panic buying of toilet paper and hygiene products across the country,” Statscan said.
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