Canadian manufacturing sales rose +0.6% MoM and fell -1.1% YoY in December, rebounding after two monthly declines.

• Motor vehicle sales increased +12.0% MoM to $4.3B, driven by higher production after semiconductor related disruptions, marking a sharp recovery from prior weakness.

• Food product sales rose +2.0% MoM to $13.3B entirely on higher volumes, while petroleum and coal products declined -5.1% MoM to $7.7B due to lower prices and volumes.

• In constant dollars, manufacturing sales increased +1.8% MoM as the Industrial Product Price Index fell -0.6%, indicating real output growth alongside price declines.

• Total inventories decreased -1.2% MoM to $119.8B, the third straight monthly decline, led by goods in process (-2.5%), finished products (-1.2%), and raw materials (-0.4%).

• The inventory to sales ratio fell to 1.69 (from 1.72), showing improved inventory turnover conditions.

• Unfilled orders rose +0.4% MoM to $114.4B, mainly from electrical equipment manufacturing, suggesting some future production support.

• Capacity utilization declined to 76.8% (from 78.7%), with the largest drops in non metallic mineral products, petroleum and coal, and transportation equipment, indicating softer operating intensity.