Canada January Factory Sales Unexpectedly Fall on AutosGreg Quinn
Canadian factory sales fell in January, an unexpected decline that was the fourth in five months, on drops in automobile and aircraft.
Sales fell 0.2 percent to C$48 billion ($46.8 billion), Statistics Canada said today in Ottawa. None of the 20 economists surveyed by Bloomberg forecast a decline, and their median estimate was for a 0.6 percent gain. The agency also reported today that wholesale sales rose 0.3 percent in January, less than the 0.4 percent economists had forecast.
Factory and wholesale sales have stagnated for almost a year, and the central bank has urged companies to invest to regain competitiveness hampered by a strong currency. Finance Minister Jim Flaherty said in a March 18 letter to Conservative Party lawmakers obtained by Bloomberg News that his budget this week will include measures to support manufacturers amid the slowest economic growth since the 2009 recession.
“The key implication from today’s reports is that it suggests a soft start for monthly industry gross domestic product, which is tracking around 0.1 percent in January,” said Mazen Issa, Canada macro strategist at TD Securities in Toronto. Canada reports January economic growth on March 28.
The Canadian dollar declined a second day against its U.S. peer after the reports, weakening 0.4 percent to C$1.0263 per U.S. dollar at 10:40 a.m. in Toronto. One Canadian dollar buys 97.44 U.S. cents.
Motor vehicle sales fell 3.7 percent to C$3.72 billion in January, bringing the decline over the previous 12 months to 15.5 percent, Statistics Canada said. Aerospace and parts production dropped 19.7 percent to C$1.14 billion in the month, still 22.4 percent higher than 12 months earlier.
Petroleum and coal fell 1.8 percent to C$7.05 billion, while food sales declined 1.3 percent to C$6.68 billion.
Saputo Inc. said March 14 it will close a 100-worker cheese factory in Warwick, Ontario, in June 2014.
Total factory sales declined 1.6 percent in January from a year earlier, Statistics Canada said.
Sales fell in seven of 21 categories tracked by Statistics Canada in January, accounting for 52 percent of production.
Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales fell 0.4 percent.
Unfilled orders rose 5.8 percent to C$69 billion, the highest since November 2008, on a 10 percent jump in aerospace backlogs to a record C$39.6 billion.
Inventories rose 1.7 percent to C$65.4 billion, with the ratio of factory stockpiles to sales rising to 1.36 from 1.34.
New orders rose 5.1 percent to C$51.8 billion.