Canada Factory Sales Fall 0.2% as Auto Gains Curb Oil DropGreg Quinn
Canadian factory sales declined by 0.2 percent in August, and the first decline in four months was smaller than economists forecast with damage from falling energy prices curbed by gains for automakers.
The decline followed two months of 1.7 percent increases, and lowered sales to C$52.1 billion ($40.4 billion) from C$52.2 billion, Statistics Canada reported Friday from Ottawa. Economists forecast August sales would decline by 1 percent according to the median of a Bloomberg survey with 18 responses.
Factory sales remain below a peak of C$53.7 billion set in July 2014, evidence manufacturers have yet to reap the full benefit of the Canadian dollar’s 10 percent decline this year and increasing demand from the U.S.
The persistent weakness is an issue in Canada’s Oct. 19 election, with Prime Minister Stephen Harper touting balanced budgets, free trade agreements and reduced taxes as benefits to the industry. Liberal Leader Justin Trudeau has taken a lead in recent polls on Harper in part with calls to boost growth with deficit spending on infrastructure.
Petroleum and coal sales fell 5.2 percent to C$5.11 billion as prices declined by 4.7 percent, taking the drop over the 12 months through August to 27.9 percent. Aerospace sales also fell by 3.5 percent to C$1.90 billion and machinery sales by 1.7 percent to C$2.82 billion.
The Bank of Canada says the economy will rebound in the second half of this year as momentum rebuilds following an oil shock that shrank output in the first and second quarters. The main evidence of that kind of strength in today’s report came from the 6.7 percent gain in motor vehicles to C$5.67 billion, for a 12-month gain of 23.9 percent.