Monthly Survey of Manufacturing, May 2025
Released: 2025-07-15
Total manufacturing sales declined 0.9% to $68.7 billion in May, marking the lowest level since January 2022. The decline in May 2025 was mainly due to reduced sales in the petroleum and coal product (-8.4%) and machinery (-2.7%) subsectors. Excluding the petroleum and coal product subsector, total manufacturing sales edged down 0.1% during the same period. The declines were partially offset by a 6.9% increase in production of aerospace products and parts. Year over year, total manufacturing sales were down 4.1% in May.
On a constant dollar basis, sales decreased 0.7% in May to the lowest level since October 2021, while the Industrial Product Price Index was down 0.5%.
Chart 1
Manufacturing sales
Impact of tariffs on manufacturing activities
Feedback from respondents highlighted the impact that the recent tariffs imposed by the United States have had on Canada's manufacturing sector. According to data collected, the impact of tariffs on Canada's manufacturing sector in May was smaller than in April. In May, nearly half of manufacturers reported being impacted by the tariffs, a decrease of about 10 percentage points from April. The impacts in May were most pronounced through price increases (reported by one-quarter of respondents), higher expenses for raw materials, shipping or labour (reported by one-fifth) and changes in demand for products (reported by one-fifth). Although the precise sales lost due to the tariffs cannot be quantified, data suggest that sales of transportation equipment, machinery and primary metals were most affected in May. Ontario experienced the largest decline in sales attributable to the tariffs, compared with other provinces.
Petroleum and coal product subsector leads the decline
Sales of petroleum and coal products declined 8.4% to $6.1 billion in May, the fourth consecutive monthly decline and the lowest level since June 2021. Sales in constant dollars were down 7.7% in May 2025. The decline mainly stemmed from several partial and full shutdowns across refineries in Quebec, Alberta, Ontario and Saskatchewan, some of which had continued since April. On a year-over-year basis, petroleum and coal product sales decreased 22.7% in May.
Sales of machinery fell 2.7% to $4.3 billion in May, following a 1.0% increase in April. The decline was largely attributable to reduced sales of agricultural, construction and mining machinery. Year over year, sales in the machinery subsector declined 3.8% in May.
Production of aerospace products and parts increased 6.9% to $2.8 billion in May, the second-highest level on record. Production rose across many major manufacturers, driven by stronger demand for commercial and business aircraft and their parts. The aerospace sector was among the least affected by the tariffs. Meanwhile, total exports of aircraft, aircraft engines and aircraft parts increased 1.2% in May.
Sales decline in four provinces
Sales decreased in four provinces in May, led by Alberta and Quebec. Sales in British Columbia and Ontario increased the most.
In Alberta, sales fell 6.6% to $7.9 billion in May, on lower sales in 15 of the 21 subsectors. The decline was driven by decreased sales in the petroleum and coal product (-11.5%) and chemical product (-4.8%) subsectors. While maintenance shutdowns at some refineries were responsible for the drop in sales of petroleum and coal products, the decline in the chemical product subsector stemmed from reduced sales of basic chemicals. On a year-over-year basis, total sales in Alberta declined 9.3% in May.
Sales in Quebec reached their lowest level since December 2021; they fell 2.3% to $17.1 billion in May 2025. This marked the fifth consecutive monthly decline. This decrease was primarily due to lower sales in the petroleum and coal product and machinery subsectors. However, this decline was partially offset by a 4.5% increase in the production of aerospace products and parts. Total sales in Quebec were 7.7% lower in May compared with the same month one year earlier.
Following three consecutive monthly declines, sales in British Columbia increased 2.1% to $5.4 billion in May, primarily due to gains in durable industries (+3.4%), notably in the transportation equipment and non-metallic mineral subsectors. Despite the monthly increase, total sales on a year-over-year basis were 2.4% lower in May.
Sales in Ontario edged up 0.4% to $30.8 billion in May, following two consecutive monthly declines. Higher sales of chemical products (+4.8%) and fabricated metals (+6.2%) were the primary contributors to this gain. Within the chemical product subsector, higher sales of pesticides, fertilizers and other agricultural chemicals were particularly notable. However, the provincial sales increase was partially offset by reduced sales in the petroleum and coal product subsector (-4.5%) and motor vehicle parts industry group (-2.6%). Ontario experienced the largest decline in sales due to tariffs, which significantly impacted the transportation equipment, primary metal and machinery subsectors.
Total inventories increase
Total manufacturing inventories increased 0.7% to $120.3 billion in May. All inventory components rose in May, with goods in process inventories (+2.0%) posting the largest increase. Higher inventories of aerospace products and parts (+2.6%) and fabricated metals (+2.7%) contributed the most to the gain in total inventories. Total inventories in the primary metal subsector (-2.1%) decreased the most during this period.
Chart 2
Inventories increase in May
The inventory-to-sales ratio reached to its highest level since May 2020, increasing from 1.72 in April 2025 to 1.75 in May. This ratio measures the time, in months, required to exhaust inventories if sales remain at their current level.
Chart 3
The inventory-to-sales ratio increases in May
Unfilled orders decrease
Total unfilled orders edged down 0.4% to $109.5 billion in May; this decrease was entirely due to reduced unfilled orders of aerospace products and parts (-1.4%). Excluding this industry group, unfilled orders were up 0.4% in May.
Chart 4
Unfilled orders decrease in May
Capacity utilization rate increases
The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector increased from 76.4% in April to 78.6% in May. The most notable gains were in the non-metallic mineral (+8.6 percentage points), food (+5.2 percentage points) and chemical (+3.3 percentage points) product subsectors. The capacity utilization rate declined 2.3 percentage points in the machinery subsector during the same period.
Chart 5
Capacity utilization rate increases in May
Focus on Canada and the United States
The United States is important for Canadian manufactured products, serving as Canada's largest export market. In 2024, Canadian manufacturers sold about half of their products to foreign customers, with roughly 80% of those exports going to the United States. The transportation equipment and food product subsectors were the top exporters. Notably, in 2024, Canadian transportation equipment manufacturers sold approximately two-thirds of their products to the United States, which accounted for roughly one-quarter of total exports of manufactured products to the United States.
For more data and insights on areas touched by the socio-economic relationship between Canada and the United States, see the Focus on Canada and the United States webpage.
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Sustainable development goals
On January 1, 2016, the world officially began implementing the 2030 Agenda for Sustainable Development—the United Nations' transformative plan of action that addresses urgent global challenges over the following 15 years. The plan is based on 17 specific sustainable development goals.
The Monthly Survey of Manufacturing is an example of how Statistics Canada supports the reporting on the global sustainable development goals. This release will be used to help measure the following goal:
Note to readers
Monthly data in this release are seasonally adjusted and are expressed in current dollars, unless otherwise specified.
Seasonally adjusted data are data that have been modified to eliminate the effect of seasonal and calendar influences to allow for more meaningful comparisons of economic conditions from period to period. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
Trend-cycle estimates are included in selected charts as a complement to the seasonally adjusted series. These data represent a smoothed version of the seasonally adjusted time series and provide information on longer-term movements, including changes in direction underlying the series. For information on trend-cycle data, see Trend-cycle estimates – Frequently asked questions.
Both seasonally adjusted data and trend-cycle estimates are subject to revision as additional observations become available. These revisions could be large and could even lead to a reversal of movement, especially for reference months near the end of the series or during periods of economic disruption.
Non-durable goods industries include food; beverage and tobacco products; textile mills; textile product mills; apparel; leather and allied products; paper; printing and related support activities; petroleum and coal products; chemicals; and plastics and rubber products.
Durable goods industries include wood products; non-metallic mineral products; primary metals; fabricated metal products; machinery; computer and electronic products; electrical equipment, appliances and components; transportation equipment; furniture and related products; and miscellaneous manufacturing.
Production-based industries
For the aerospace and shipbuilding industry groups, the value of production is used instead of the value of sales of goods manufactured. The value of production is calculated by adjusting monthly sales of goods manufactured by the monthly change in inventories of goods in process and finished products manufactured. The value of production is used because of the extended period of time that it normally takes to manufacture products in these industries.
Unfilled orders are a stock of orders that will contribute to future sales, assuming that the orders are not cancelled.
New orders are those received whether sold in the current month or not. New orders are measured as the sum of sales for the current month plus the change in unfilled orders from the previous month to the current month.
Manufacturers reporting sales, inventories and unfilled orders in US dollars
Some Canadian manufacturers report sales, inventories and unfilled orders in US dollars. These data are then converted to Canadian dollars as part of the data production cycle.
For sales, based on the assumption that they occur throughout the month, the average monthly exchange rate for the reference month established by the Bank of Canada is used for the conversion. The monthly average exchange rate is available in table 33-10-0163-01. Inventories and unfilled orders are reported at the end of the reference period. For most respondents, the daily average exchange rate on the last working day of the month is used for the conversion of these variables.
However, some manufacturers choose to report their data using a day other than the last working day of the month. In these instances, the daily average exchange rate on the day selected by the respondent is used. Note that because of exchange rate fluctuations, the daily average exchange rate on the day selected by the respondent can differ from both the exchange rate on the last working day of the month and the monthly average exchange rate. Daily average exchange rate data are available in table 33-10-0036-01.
Revision policy
Each month, the Monthly Survey of Manufacturing releases preliminary data for the reference month and revised data for the previous three months. Revisions are made to reflect new information provided by respondents and updates to administrative data.
Once a year, a revision project is undertaken to revise multiple years of data.
Real-time data tables
Real-time data tables 16-10-0118-01, 16-10-0119-01, 16-10-0014-01 and 16-10-0015-01 will be updated on July 28.
Next release
Data from the Monthly Survey of Manufacturing for June will be released on August 15.
Contact information
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