Canadian factory sales declined at the fastest pace in seven months in September, led by lower receipts in the automobile and petroleum industries.
Sales fell 1.5 percent to C$51.1 billion ($38.4 billion), Statistics Canada said Monday in Ottawa. The decrease was more than double the lowest of 17 responses in a Bloomberg economist survey, in which the median forecast was for a 0.2 percent increase. The agency revised its August figure to a 0.6 percent decline from an earlier reading of 0.2 percent.
Oil companies are cutting investment as prices remain below $50 a barrel. Petroleum and coal-product sales dropped 7.1 percent to C$4.83 billion in September, and slid 28 percent from the same month a year earlier. The monthly decline reflects longer-than-usual maintenance shutdowns, Statistics Canada said.
Meanwhile, manufacturers outside the energy industry have failed to capitalize on the Canadian dollar’s 13 percent decline this year, even amid signs of a U.S. recovery.
The world’s 11th largest economy shrank in the first half of the year and today’s report suggests another decline is coming for the month of September, said Mazen Issa, senior foreign exchange strategist at TD Securities in New York.
“The Canadian economy is still far from a total recovery from the first half shock,” he said. “The Canadian dollar needs to remain weak for a persistent period of time to facilitate the adjustment in the economy.”
Canada’s dollar weakened 0.2 percent to C$1.3325 per U.S. dollar at 9:29 a.m. Toronto time. Government bond yields declined with benchmark debt due in five years falling to 0.93 percent from 0.95 percent.
Motor vehicle sales fell 10.3 percent to C$5.05 billion, after reaching the highest since March 2007 the previous month.
Manufacturing sales fell in 13 of 21 categories tracked by Statistics Canada, accounting for 79 percent of production. The major gains in September were in machinery and primary metals.