TD Securities forecasts a sharper-than-expected decline in June manufacturing sales due to lower petroleum prices, offset partly by motor vehicles and metals.
Canadian manufacturing sales are projected to decline 0.4% month-on-month in June, missing the market consensus of a 0.1% drop, driven by lower petroleum prices. The energy sector’s weakness follows a 2.6 percentage point drag on total exports in June, despite stable volumes.
Motor vehicles, metal products, and other durable goods are expected to partially offset the nominal energy drag. While volumes may modestly outperform the headline print, the overall impact on GDP is likely to remain limited. The contrast with a 4-year high in the S&P Manufacturing PMI highlights sector divergence.
The forecast aligns with broader trends showing mixed signals in manufacturing activity, including a pullback in hours worked during the month.