Canadian Manufacturing Rebound Is Less Impressive Than It Looks, Capital Economics Says

10:37 AM EDT, 10/15/2026 (MT Newswires) -- Canadian manufacturing sales increased 1.5% monthly in August, although volumes were flat, indicating that higher prices accounted for most of the growth, wrote Capital Economics in a note following the release of Statistics Canada's data on Thursday. Together with a 1.8% decline in wholesale sales volumes, the figures suggest that the preliminary estimate of 0.2% month-over-month gross domestic product growth may be at risk of being revised lower, wrote Capital Economics Senior North America Economist Thomas Ryan in the note. New orders also slipped, reinforcing signs of underlying softness, said Ryan. The figures suggest expectations of a robust, manufacturing-led recovery were optimistic, with US tariffs further weighing on activity, added Capital Economics. This supports the view of Capital Economics that the Bank of Canada will raise rates only twice, half the roughly four hikes currently priced in by markets.