Data released by Statistics Canada yesterday suggested an encouraging picture for Canadian manufacturing and wholesale sales in February. This came after a very difficult January, when both critical measures of sales fell markedly. This could be positive news for retailers, who might benefit from higher product availability. However, the encouraging results were tempered by the uncertainty brought on by the conflict in the Middle East, which has impacted prices and consumer confidence.

• Canadian manufacturing sales increased by 3.6% in February. Despite coming in just below the preliminary estimate, it was the strongest pace of monthly growth since January 2023. February’s sales were a robust rebound from the 3.0% decline in January.
• February’s increase was driven by an 18.8% increase in sales of transportation equipment, primarily motor vehicles and parts. Transportation equipment sales had fallen in January. Sales of primary metals also had a notable increase in February.
• Wholesale sales also experienced a strong increase in February, rising by 2.0%. This marked its largest increase since April 2024.
• Similar to manufacturing sales, the overall growth of wholesale sales benefited from strong sales of motor vehicles and parts. Sales in the food and beverage industry and the household goods industry also increased.
• Today, we will get a look at another critical sector of Canada’s economy when existing home sales from March are announced.

The conflict in the Middle East began at the end of February, pushing up prices and lowering consumer and business confidence in March. Upcoming data releases will give some insight on how that might have impacted demand and actual sales volumes. The Canadian and global economies are filled with uncertainty. Yesterday, however, there were glimmers of hope the end of the conflict could be nearing, according to US President Donald Trump, who said the two sides want to enter another round of peace talks.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.