Canadian manufacturing sales fell in September as chip shortage hurt auto sector

·2 min read

OTTAWA — Canadian manufacturing sales fell three per cent to $58.5 billion in September as motor vehicle sales fell due to the ongoing shortage of semiconductors that has hurt auto production.

Statistics Canada said Monday sales of motor vehicles fell 35.6 per cent to $1.9 billion, the lowest level since May 2020, while sales of motor vehicle parts dropped 13.5 per cent to $1.8 billion.

Meanwhile, higher prices helped petroleum product sales rise three per cent to $6.7 billion in September.

Stephen Brown, senior Canada economist at Capital Economics, said renewed closures of auto plants weighed heavily on manufacturing sales in September.

"While many factories reopened again this month, there is still a chance that overall manufacturing sales volumes will fall again this quarter, albeit more modestly than in the third," Brown wrote in a report.

The auto sector has been hit hard by the global shortage of semiconductor chips due to pandemic-related production issues and a surge in demand for electronics. The shortage has forced auto producers to slow or halt production around the world.

Brown noted that even when the transportation sector was excluded that manufacturing sales fell by 0.8 per cent on a month-over-month basis.

Total manufacturing sales in constant dollars fell 4.2 per cent in September, indicating a lower volume of goods sold.

In a separate report, Statistics Canada said wholesale sales rose one per cent in September to $71.3 billion.

The increase came as the miscellaneous goods subsector rose 5.9 per cent due to a 20.9 per cent increase in sales in the agricultural products industry as demand for potash domestically and internationally rose.

Offsetting some of the increase was a two per cent drop in wholesale sales of motor vehicles and motor vehicle parts and accessories in September.

Building material and supplies wholesalers also saw sales drop 1.4 per cent.

This report by The Canadian Press was first published Nov. 15, 2021.

The Canadian Press

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