Agency reported manufacturing sales fell 1.4 per cent in November to $51.5 billion, marking third drop in four months
OTTAWA—Manufacturing sales fell 1.4 per cent in November to $51.5 billion—the third drop in four months, Statistics Canada reported.
The results compared with a drop of 0.7 per cent that economists had expected, according to Thomson Reuters.
Royal Bank economist Josh Nye said the second consecutive monthly decline was disappointing, but noted it followed a fairly strong performance by the manufacturing sector earlier in 2014.
“Looking ahead, we expect the recent drop in oil prices will provide a boost to Canadian manufacturers in 2015 as the effects of a stronger U.S. economy and weaker Canadian dollar more than offset any decline in petroleum refining,” Nye wrote in a note to clients.
The price of oil is currently trading at less than half of its peak of last year, while the Canadian dollar has been at lows not seen since 2009.
The lower-than-expected manufacturing sales data came just ahead of the Bank of Canada’s next interest rate announcement.
The central bank is expected to maintain its key interest rate at one per cent when it makes its announcement Jan. 21.
Statistics Canada said year-to-date sales in 2014 were 5.2 per cent higher than those in the first 11 months of 2013.
The drop for the month was due to lower sales of motor vehicles, chemicals, primary metals and food.
Motor vehicles sales fell 5.9 per cent in November to $4.6 billion, offsetting almost all of their gains of the previous two months.
Chemical manufacturers saw sales drop 3.6 per cent, while the primary metal industry reported sales down 3.0 per cent.
The food manufacturing industry dropped 1.3 per cent.
The losses were partially offset by a 9.1 per cent increase in the production of aerospace products and parts.
Overall, manufacturers in 16 of 21 industries—representing more than 80 per cent of total Canadian manufacturing—reported lower sales in November.
In constant dollars, sales fell 1.4 per cent, indicating that a lower volume of manufactured goods was sold.