By Robb M. Stewart


OTTAWA--Canadian factory shipments notched the biggest monthly jump in more than four years, buoyed by record petroleum and coal sales in April.

Manufacturing sales increased 4.2% from the month before to a seasonally adjusted 77.05 billion Canadian dollars, the equivalent of about US$55.08 billion, Statistics Canada said Monday.

This was a third straight increase in trade for the sector, a further sign manufacturers in the country are recovering after the hit last year from U.S. tariffs and trade uncertainty.

April's strength, although driven by a production ramp up at several refineries following maintenance shutdowns the month before, extended beyond oil and gas. And in volume terms, sales were up 1.8% from March to April, supporting expectations Canada's economy has rebounded after a weak start to 2026.

The lift in volumes takes sales back up to just shy of where they were early last year, before President Trump imposed tariffs on imports from Canada, Capital Economics North America economist Bradley Saunders said. "This tentative recovery could imply manufacturers have finally adapted to the new trading relationship with the U.S.," he said.

S&P Global's Canada manufacturing purchasing managers index slipped in May but continued to signal an industry showing modest expansion, with companies reporting a general rise in demand and success in securing new customers.

The increase in sales in April was the strongest since February 2022, with gains in 17 of the 21 sectors tracked by Statistics Canada.

Petroleum and coal product sales rose 22.6% from the month before to C$11.77 billion, following a 25.5% increase in March. The jump was driven mainly by higher volumes, with sales in price-adjusted terms climbing 17.5% in April.

Sales excluding petroleum and coal were up a modest 1.4%, and climbed 10.6% on the same month last year.

Food product sales also increased, rising 2.9% to a record high with a lift in grain and oilseed milling. Moderating that, sales decreased in all primary metal industry segments, except foundries.

New orders and unfilled orders both rose a third month in a row, with new orders up 1.3% month-over-month. Inventories held by factories edged up 0.5% to C$124.96 billion, led by higher stocks of machinery, petroleum and coal products, and transportation equipment.

Recent data point to a return to growth for Canada's economy this quarter after a weak start to the year, though the conflict in the Middle East has raised uncertainty for the country that was already heightened by U.S. trade policy and tariffs. The Bank of Canada for a fifth time in a row last week left its policy interest rate unchanged as officials again looked through the war's near-term impact on inflation.

Statistics Canada previously estimated gross domestic product increased 0.4% in April from a month earlier, which would represent a solid start to the second quarter. GDP dipped 0.1% on an annualized basis in the first three months of the year, a second consecutive quarterly contraction after the economy shrank 1% in the final quarter of 2025 with a pull back in government spending.

Goods exports rose a third month running in April, hitting a record high thanks to increased crude oil and vehicle sales to the U.S.

Wholesalers--the largest component of Canada's services sector--recorded a 2.8% rise in sales in April on a month earlier to C$138.83 billion. Excluding sales by petroleum, oilseed and grain merchants, wholesale trade was up 0.6% for the month but fell 0.3% in volume terms from the prior month.

Trade relations with the U.S. and the evolving conflict in the Middle East have been identified by the Bank of Canada as the two main risks faced by Canada's economy. For the country's manufacturers, much depends on the outcome of the renegotiation of the existing trade pact between Canada, Mexico and the U.S., Capital Economics' Saunders said.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

06-15-26 1115ET