Canadian manufacturing took hit during GM strike

Manufacturing sales fell in Canada in October as the impact from the General Motors (NYSE: GM) strike in the U.S. weighed on the auto sector amid lackluster performance from other industries.

The 0.7% decline, appearing in data released by Statistics Canada on Dec. 17, was still worse than expected by analysts, who had predicted a flat month.

Sales of transport equipment dropped by 3% to C$11 billion during the month as Canadian plants felt the disruption of the United Auto Workers strike at U.S. GM plants. 

“October’s disappointing release should not come as a major surprise, with the impact of the UAW strike largely prewritten,” TD economist Omar Abdelrahman wrote

The strike disrupted the tightly integrated cross-border auto industry as parts often make multiple moves across the U.S.-Canada border. In Canada, it resulted in temporary layoffs at GM’s Ontario plants and suppliers and at least one trucking company

The auto weakness occurred amid an overall flatness in other manufacturing sectors. 

Some bright spots included a 1.3% increase in nondurable goods, a ramp-up in petroleum shipments and a modest rise in food sales.

The data also showed significant regional disparities. Toronto bucked the national trend, posting a 5.1% increase in manufacturing sales on strength in transport equipment and food. 

Beyond the whiplash of the GM strike, Abdelraham pointed to the “cloudy outlook” for manufacturing shipments and exports as an area of concern. 

Unrelated to the strike, GM is ending vehicle production at its assembly plant in Oshawa, Ontario, this week. GM announced the shutdown in November 2018. The plant produces the Chevrolet Silverado and GMC Sierra.

GM plans to repurpose the facility to produce parts and conduct vehicle testing.