Factory sales strengthened markedly in June as plants continued to increase their operating capacity. Total manufacturing sales rose by 20.7% as all 21 manufacturing industries reported gains. Led by higher sales in Ontario and Quebec, June’s record increase followed an 11.6% gain in May as manufacturing activity continued to recover from COVID-19 related shutdowns. Nevertheless, total factory sales in June remained about 13% below pre-pandemic levels in February.

Sales in the transportation equipment industry more than doubled in June, led by higher sales of motor vehicles and parts as most plants returned to full production following COVID-19 related shutdowns earlier in the spring. Over one-half of June’s headline increase reflected higher sales of motor vehicles and parts. Higher sales of petroleum and coal products also contributed to the record gain, as refineries ramped up production in response to higher fuel demand as provincial economies continued to reopen.

On August 11th, the agency released revised capital intentions data for 2020. Based on survey information collected in June and July, these new estimates underscore the extent to which COVID-19 has weighed on the capital plans of businesses in most industrial sectors.

Prior to COVID-19, private-sector organizations anticipated spending 0.9% more in 2020 on non-residential construction and machinery and equipment (M&E); the new, revised intentions for 2020 point to a 16.6% decrease in private-sector outlays, reflecting sharply lower intentions among oil and gas producers, manufacturers, and accommodation and food service companies. By contrast, public-sector organizations anticipate spending 4.2% more on non-residential construction and M&E. Overall, combined spending by private and public organizations is now expected to be 9.5% below levels in 2019, with steep declines in Newfoundland and Labrador, Alberta and Saskatchewan.

Annual capital outlays in oil and gas extraction are expected to decline by 31.7% as many energy companies have substantially revised their capital plans in recent months. At $21.7 billion, anticipated spending among oil and gas producers is down over two-thirds from levels reached in 2014 before energy companies reduced their investment spending during the oil shock.

Manufacturers now anticipate their annual capital outlays to fall by 18.5% in 2020, led by sizeable declines among chemical producers and makers of transportation equipment. Annual capital spending in the accommodation and foods service sector is expected to fall by almost 40%.

The leading indicator of cross-border traveller volume for July was also released on August 11th. July marked the fourth consecutive full month of restrictions on non-essential travel across the Canada-U.S. border and crossings by automobile remained flat. The usual spikes associated with Canada Day and the Fourth of July did not occur. U.S. residents took just 70,500 trips to Canada through 111 land ports equipped with automated Integrated Primary Inspection Lines (IPIL), down 97% from the same month last year. And Canadian residents made 144,500 return trips from the United States through these same ports, down 95% from last July. Since the 30-day restriction on non-essential travel across the border was imposed on March 21st, it has been extended on four occasions. The most recent of these, on July 16th, extended the border closure until August 21st. As such, land crossings will remain more or less flat well into August.

Source: Statistics Canada