Canada’s manufacturing sales continued to strengthen in the second quarter of 2026. Sales climbed for the fourth consecutive quarter, reaching a record high.
Manufacturing sales rose 9.3 per cent to $235.1 billion in the second quarter, according to data released Friday. The increase adds to signs that the Canadian economy is rebounding after a sluggish start to the year.
Petroleum and coal products led the gains, with sales rising 33.7 per cent during the quarter. Transportation equipment followed with a 14.7 per cent increase. Miscellaneous manufacturing recorded the largest decline, with sales falling 14.9 per cent.
Even excluding petroleum and coal products, manufacturing sales rose a solid 6.1 per cent.
June sales continue to climb
The gains extended into June, when manufacturing sales edged up 0.1 per cent to $78.8 billion. It marked the fifth consecutive month of increases, led by gains in the chemical and transportation equipment sectors.
The increase was broad-based, with 15 of 20 manufacturing subsectors reporting higher sales during the month. Manufacturing sales volumes also rose 4.2 per cent year over year in June.
However, petroleum and coal product sales declined sharply in June, offsetting some of the broader gains. It was the sector’s largest decline following three consecutive monthly increases.
The manufacturing figures come as the Canadian economy shows other signs of picking up momentum.
The Bank of Canada projected second-quarter economic growth of 2.5 per cent in its latest Monetary Policy Report, following two consecutive quarters of negative growth. Economists also expect the economy to have expanded in the second quarter.
“Another broad-based rise in manufacturing sales in June poses upside risks to an already punchy second-quarter GDP estimate and, paired with recent strength in the labour market, leaves soft core inflation as the last bastion for our call that the Bank of Canada will delay rate hikes until 2027,” wrote Bradley Saunders, North American economist at Capital Economics, in a note on Friday morning.
Tariffs remain a major uncertainty
The stronger manufacturing numbers arrive just five days before new 50 per cent U.S. tariffs are scheduled to take effect.
U.S. President Donald Trump said the tariffs were in response to “Canada’s discriminatory treatment of U.S. commerce.” The U.S. administration has described the levies as retaliation for Canadian tariffs and quotas on dairy, automobiles and alcohol.
Canadian Trade Negotiator Janice Charette was in Washington, D.C., this week meeting with U.S. Trade Representative Jamieson Greer, but no deal had been reached as of Friday afternoon.
Some of the manufacturing sectors facing the greatest exposure to existing U.S. tariffs nevertheless posted strong results in June.
Motor vehicle parts sales increased 6.2 per cent month over month, while motor vehicle sales rose 0.1 per cent. Wood product sales climbed 5.1 per cent.
Looking at the year-over-year figures, motor vehicle parts sales were up 12.8 per cent and motor vehicle sales increased 20.9 per cent. Wood product sales, however, were down 3.2 per cent.
“Sales of motor vehicle parts and wood products also rose strongly, and will continue to do well if Ottawa successfully lobbies for some reduction in the Trump administration’s Section 232 tariffs, as media reports are suggesting,” Saunders wrote.
Looking ahead
For now, the manufacturing figures offer another positive signal for an economy that began the year on weaker footing. But with new U.S. tariffs looming, the strength of the recovery could depend heavily on how Canada’s trade relationship with its largest trading partner develops in the months ahead.
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