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Manufacturing sales fell 2.1% in April as chip shortage hurt auto industry

The Canadian Press logoThe Canadian Press 2021-06-14
a car parked in a parking lot © Provided by The Canadian Press

OTTAWA — Canadian manufacturing sales fell 2.1 per cent to $57.1 billion in April as the auto industry was hurt by a continued shortage of semiconductor chips that prompted companies to halt or slow production.

Statistics Canada said Monday transportation equipment sales fell 23.6 per cent to $6.4 billion as motor vehicle sales fell 36.5 per cent to $2.3 billion in April, the largest month-over-month decrease since April 2020.

Sales in the motor vehicle parts industry fell 19.0 per cent to $1.9 billion.

A global shortage of computer chips, which are used in a wide range of critical components, has caused auto companies to slow production around the world.

TD Bank economist Omar Abdelrahman said that although some plants restarted production in June, much uncertainty remains for the auto industry. 

"A full recovery in production may be drawn out over the next few quarters as the impacts of these global shortages and supply chain disruptions linger," he wrote in a report.


Video: Global chip shortage started in automotive sector and is spreading to other industries: Analyst (CNBC)

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However, Abdelrahman said the outlook for manufacturing sales outside of the auto industry is not all that bad. 

"The reopening of provincial economies and strength in Canada's largest export market (the U.S.) should provide a lift to demand," he wrote.

Manufacturing sales excluding the transportation equipment industry rose 1.5 per cent in April.

Machinery sales rose 14.6 per cent to a record $3.7 billion in April, while wood product sales also rose 6.5 per cent to a record $4.9 billion for the month.

Sales of petroleum and coal products fell 7.1 per cent to $5.1 billion in April because of maintenance shutdowns at some refineries.

Statistics Canada said sales in constant dollars fell 3.3 per cent in April, indicating a lower volume of goods sold.

This report by The Canadian Press was first published June 14, 2021.

The Canadian Press

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