Canada factory sales slip, weigh on August growth
By Louise Egan and Randall Palmer
OTTAWA (Reuters) - Canadian manufacturing sales unexpectedly fell in August, likely dampening economic growth in the month as the outlook for the sector remains murky in light of the fiscal standoff in its top market, the United States.
Factory shipments sank 0.2 percent from July to a seasonally adjusted C$49.5 billion ($47.6 billion) in the month, dragged down by weakness in the vehicle assembly and food industries as well as an outsized drop in the small jewelry and silverware sector, Statistics Canada said on Wednesday.
Analysts surveyed by Reuters had predicted a 0.2 percent gain in August. Eleven of 21 industries registered setbacks.
The volume of sales, used in calculating gross domestic product, fell 0.3 percent.
The report suggests manufacturing will contribute little to monthly GDP and supports the Bank of Canada's move to downgrade its growth forecast for the third quarter to between 2.0 and 2.5 percent from 3.8 percent, annualized.
"Manufacturing has stagnated in 2013 and not much positive momentum should be expected over the balance of the year as the prospects of a healthy recovery in the U.S. into the fourth quarter look precarious," said Mazen Issa, an economist with TD Securities.
After weeks of bitter fighting, U.S. lawmakers prepared on Wednesday to put forth a proposal to raise the debt limit and reopen a partially shuttered government in hopes of avoiding a historic default which could throw the economy back into recession.
Canada sells about 75 percent of its exports in the United States. Continued...