In real terms, total sales increased 1.0% in March, while the Industrial Product Price Index was up 2.4%.

On a quarterly basis, manufacturing sales edged up 0.1% to $214.1 billion in the first quarter of 2026, the third consecutive quarterly increase. The petroleum and coal product (+4.9%) and primary metal (+4.3%) subsectors were the main contributors to the quarterly increase. Meanwhile, transportation equipment sales (-6.5%) declined the most.

Petroleum and coal product sales drive monthly increase

Sales in the petroleum and coal product subsector rose 22.7% to $9.4 billion in March, marking their highest level since September 2023. The increase was driven largely by higher prices, as sales in real terms fell 3.5%. Prices for energy and petroleum products grew by 27.4% in March amid increased geopolitical tensions in the Middle East, which disrupted energy markets and shipping routes through the Strait of Hormuz. Petroleum product sales on a quarterly basis were up 4.9% in the first quarter of 2026, marking the third consecutive quarterly gain. Exports of refined petroleum energy products rose 14.4% in March.

Following a 19.8% increase in February, sales of transportation equipment rose 6.0% to $11.4 billion in March. Within the transportation equipment subsector, the motor vehicle industry group posted the largest gain (+15.0%). Auto production increased in March following the completion of retooling at a major auto manufacturer and the addition of a new production shift in another motor vehicle assembly plant. Exports of motor vehicles and parts increased 5.4% in March. Despite the gain observed in March, sales of motor vehicles on a quarterly basis were down 13.6% in the first quarter of 2026.

Production of aerospace products and parts reached their highest level on record, rising 5.2% on a month-over-month basis to $3.0 billion in March. Canada's aerospace industry continues to grow in 2026 mainly due to strong global demand for commercial and business aircraft, aircraft parts and maintenance services. On a quarterly basis, aerospace production rose 1.4% to $8.7 billion in the first quarter of 2026. Exports of aircraft, aircraft engines and aircraft parts rose 1.2% in March.

Chart 1 
Manufacturing sales

Sales increase in eight provinces, led by Ontario and Alberta

Manufacturing sales rose in eight provinces in March with Ontario and Alberta posting the largest increases.

Manufacturing sales in Ontario increased 2.2% to $31.4 billion in March, marking a second consecutive monthly gain. Sales rose in 8 of 21 subsectors, led by transportation equipment (+8.1%) and petroleum and coal product (+21.8%). The increase in the transportation equipment subsector was driven by higher sales of motor vehicles (+14.4%) and motor vehicle parts (+1.0%), along with higher production of aerospace products and parts (+8.5%). Meanwhile, sales in the petroleum and coal product subsector rose 21.8% to $2.5 billion, the highest level since February 2024.

On a quarterly basis, total manufacturing sales in Ontario declined 2.1% in the first quarter of 2026, with transportation equipment contributing the most to the overall decrease.

In Alberta, sales increased 4.4% on a month-over-month basis to $8.9 billion in March, driven primarily by increased sales of chemicals (+16.8%) and petroleum and coal products (+7.7%). Higher sales of basic chemicals as well as resin, synthetic rubber, and artificial and synthetic fibres and filaments contributed the most to the gain in chemical manufacturing. With the overall increase in March, total manufacturing sales in Alberta rose 4.7% on a year-over-year basis while they were down 0.2% in the first quarter of 2026.

Total inventories increase

Total manufacturing inventories increased 1.3% to $124.2 billion in March, on higher inventories of goods in process (+1.8%), raw materials (+1.1%) and finished products (+1.2%). At the subsector level, inventories were up in 10 of the 21 subsectors, led by the petroleum and coal product (+16.3%) and fabricated metal product (+4.7%) subsectors. Meanwhile, inventories of machinery declined the most (-2.7%). On a quarterly basis, total inventory levels rose 3.0% in the first quarter of 2026.

Chart 2 
Total inventories increase in March

The inventory-to-sales ratio declined from 1.72 in February to 1.69 in March. This ratio measures the time, in months, that would be required to exhaust inventories if sales were to remain at their current level.

Chart 3 
The inventory-to-sales ratio decreases in March

Unfilled orders increase

Unfilled orders reached a new record high, rising 2.4% to $121.3 billion in March. The increase was driven by the aerospace product and parts industry group (+6.1%). Year over year, total unfilled orders were up 8.5% in March, while on a quarterly basis they rose 3.2% in the first quarter of 2026.

Chart 4 
Unfilled orders increase in March

Capacity utilization rate increases

The capacity utilization rate (not seasonally adjusted) for the total manufacturing sector rose from 76.9% in February to 82.2% in March. The gains were most noticeable in the transportation equipment (+12.6 percentage points), petroleum and coal product (+5.5 percentage points), and primary metal (+4.8 percentage points) subsectors. In contrast, the capacity utilization rate in the computer and electronic product subsector fell 0.9 percentage points during the same period.

Chart 5 
Capacity utilization rate increases in March