By Robb M. Stewart
OTTAWA--A rebound in Canadian auto production in February helped drive higher manufacturing and wholesale sales for the month.
Factory shipments rose a solid 3.6% from the month before to a seasonally adjusted 71.19 billion Canadian dollars, the equivalent of about US$51.7 billion, Statistics Canada said Wednesday. The result was slightly softer than the data agency's flash forecast for monthly rise of 3.8%, but followed a slightly bigger than previously estimated 3.1% drop in sales in the first month of the year.
Wholesale activity similarly recovered for the month, with sales rising 2% during February to C$86.77 billion, the national data agency said. That advance also was slightly weaker than the advance forecast for a 2.3% increase and came after sales dropped 1.1% to begin 2026.
In volume terms, factory sales were up 3.4%, but were 2.7% lower than the same month last year, while wholesale trade volumes rose 1.1% for the month but fell 1.9% year-over-year.
The strength of the data for February offers a positive signal for an economy expected to show sluggish growth this year, though the numbers are somewhat stale given the escalation in the ongoing Middle East conflict that has spiked energy costs and darkened the clouds over Canada's economy. Earlier advance data from Statistics Canada indicated industry-level GDP increased 0.2% between January and February, building on modest growth of 0.1% in January to put the economy on track to show a recovery in the first quarter after contracting 0.6% in annualized terms in the final three months of 2025.
Manufacturing sales in February were up in 12 of 21 sectors tracked by the agency, led by an 18.8% jump in transportation equipment after a slump in January as automotive output partially recovered from extended winter shutdowns at several assembly plants for maintenance and retooling. Vehicle sales surged more than 40% for the latest month, while exports of vehicles and parts grew a little more than 30%.
Machinery trade also picked up in February, thanks to higher prices and volumes, as did sales of primary metals largely due to demand for non-ferrous metals. Still, sales of chemical products fell for the month to the lowest level since last July, in part with a pullback in pharmaceutical and medicine sales.
Among wholesalers, the largest component of Canada's services sector, sales were up in five of the seven sectors tracked. The data excludes petroleum sales.
Motor vehicle and parts wholesaler sales climbed 6.1% as supply-chain challenges eased. Sales in the food, beverages and tobacco sector also picked up, as did sales of personal and household goods, which hit the highest level on record thanks to trade pharmaceuticals and pharmacy supplies.
Inventories held by manufacturers rose 0.6% to hit C$121.86 billion in February, led by increased stocks of machinery, food, and plastic and rubber products. The value of wholesale inventories declined 0.3% for the month to C$135.37 billion, with the largest fall coming in the motor vehicle and parts sector.
The auto-led rebound keeps the good start to the year that Canada's economy has seen on track, Bradley Saunders, North American economist at Capital Economics, said. "On the whole, today's data support the advance GDP growth estimate," he said.
The Iran war adds additional doubt for Canada's economy, which has been squeezed by trade uncertainty and concerns about the upcoming review of the trade agreement between Canada, the U.S. and Mexico. The Bank of Canada, which is set to update its economic projections when it next decides on interest rates late this month, has said that while higher oil prices should increase Canadian export revenue and support gross domestic product, they also could retrain consumer spending and add costs for many businesses.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
04-15-26 1133ET
