09:21 AM EDT, 06/09/2025 (MT Newswires) -- In Canada, early reports from Statistics Canada indicate manufacturing sales contracted by 2% month over month in April, said RBC.

Separately reported industry price data shows that three quarters of that decline was likely price-related. Oil prices were lower, reducing the nominal value of oil sales. But, the early estimate also flagged a softening in auto manufacturing. The decline coincides with 55,000, or 2.9%, job losses in the sector since January.

Canada will release April manufacturing sales on Friday.

Wholesale sales in Canada were also estimated to have declined in April, but retail sales rose by 0.5% on a month-over-month basis, according to StatsCan's advanced estimate. Going forward, the bank expects additional softening in Canadian industrial sectors as tariffs reduce United States demand for Canadian exports, especially for auto and parts, steel, and aluminum products that are disproportionately targeted by U.S. tariffs.

Offsetting some of that weakness will be resilience in domestic services consumption which has broadly held up, pointed out RBC.

Canada will publish April wholesale sales on Friday.

Overall, April's international trade data confirmed that U.S. tariff increases on Canada, while significant, have been smaller than for other major U.S. trade partners. Barring more significant changes to existing U.S. tariffs, the bank predicts growth in both Canada and the U.S. to slow this year, but expects both to avoid a recession.

RBC anticipates a more pronounced impact on inflation in the U.S., where the average import tariff rate is now substantially higher than in Canada.

The bank forecasts Canadian household net worth was little-changed in Q1, with both debt and asset levels holding around levels at the end of 2024. A pullback in equity markets in Q1 likely weighed on household financial asset holdings, but house prices edged higher.

Household debt service ratios -- ratio of debt payments to household disposable income -- likely remained elevated, but with little change from Q4 2024 at 14.4%, and still below the 15.1% peak in Q3 2023, added RBC.

Canada will release the Q1 national balance sheet on Thursday.