By Robb M. Stewart
OTTAWA--Canadian manufacturing activity began the year on weak footing, with sales in January falling to the lowest level in eight months thanks in part to an extended winter shutdown at several auto plants.
Factory shipments fell 3% from the month before to a seasonally adjusted 68.67 billion Canadian dollars, the equivalent of about $50.33 billion, Statistics Canada said Friday. Compared with a year earlier, sales were down 5.7%.
The weakness in January was slightly softer than the data agency's advance estimate for monthly drop of 3.3%, though manufacturing sales have now fallen in three of the last four months. And the advance seen in December was revised slightly lower to growth of just 0.4%.
The retreat adds to signs the economy was struggling entering 2026, and comes ahead of the Bank of Canada's next monetary policy meeting next week.
The volume of wholesale sales dropped 1.5% in January, while goods exports from Canada sank 4.7%, in part due to auto-industry production disruptions. That casts a doubt on Statistics Canada's earlier estimate gross domestic product was effectively flat during the first month of the year.
Factory sales measured in volume terms were down a steeper 3.9% for the month and 6.2% year-over-year.
Activity was down in 11 of the 21 manufacturing sectors tracked by Statistics Canada, led by transportation equipment and machinery.
Motor vehicle sales sank 38.9% in the first month of the year, hitting the lowest level since September 2021 as several major automotive assembly plants in Ontario extended shutdowns into January to complete retooling for new models and line maintenance.
Vehicle parts sales also dropped 7.7%, and auto and auto parts exports--most of which head to the U.S.--were down sharply for the month.
Excluding the auto industry, manufacturing shipments for January were down 0.5% and 2.1% below the same month in 2025.
Inventory levels held by factories rose 0.9% in the latest month, the agency said. Unfilled orders, the stock of orders that will contribute to future sales if they aren't canceled, were up for a fourth straight month, edging up 0.2% to a record C$114.76 billion.
The Bank of Canada's governing council, which has twice in a row left its policy interest rate unchanged following back-to-back cuts, projected the economy will grow about 1.8% annualized in the first quarter and a soft 1.1% over 2026.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
03-13-26 0911ET
