Manufacturing Sales Fell 2.1% in April Amid Semiconductor Chip Shortages

Canadian manufacturing sales fell 2.1 percent 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 percent to $6.4 billion as motor vehicle sales fell 36.5 percent 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 percent 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.

However, Mr. 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 percent in April.

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

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

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


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