Two of Canada’s most exposed sectors to the U.S. trade war posted stronger-than-expected gains at the start of the third quarter.

Manufacturing sales jumped 2.5% in July, while wholesale receipts rose 1.2%, Statistics Canada data showed Monday. The increases exceeded the median projections of 1.8% and 1.3%, respectively, in a Bloomberg survey of economists.

In volume terms, sales for manufacturers were up 1.6% and 0.8% for wholesalers. Total manufacturing inventories increased 0.8%, while wholesale inventories were up 0.6%.

Higher sales of motor vehicles, aerospace products and refined petroleum drove July’s manufacturing gain, though seasonal adjustment influenced the figures for the auto sector. Car sales also contributed to increases among wholesalers, along with building materials and supplies.


July is typically a month when automakers temporarily shut down assembly plants in Ontario. But the impact of seasonal closures were less pronounced this year due to tariff-driven production slowdowns already in place, including the reduced shift at the Stellantis NV plant in Windsor.

“The increases in manufacturing and wholesale sales in July suggest tentative signs of a recovery in two of the sectors hardest hit by U.S. tariffs,” Thomas Ryan, economist at Capital Economics, said in a note to investors. “Less encouragingly, new orders fell by 2.2%, while the S&P Global Manufacturing PMI remains below 50, indicating any recovery will be slow.”

Source: canadianmortgagetrends.com