UPDATE 3-Canada factory sales tumbled in bad omen for growth

Fri Feb 15, 2013 10:56am EST
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* Sales tumble 3.1 pct vs estimate of 0.8 pct decline

* Auto assembly plants decline 15.4 pct in month

* Factory sales in 2012 as a whole up 3.4 pct

By Louise Egan

OTTAWA, Feb 15 (Reuters) - Canadian manufacturers ended 2012 on a dismal note, registering the biggest monthly decrease in sales since the Great Recession, a drop that suggests growth again disappointed in the fourth quarter.

Manufacturing sales fell 3.1 percent in December from November, the sharpest decline since May 2009 in seasonally adjusted terms, due mainly to weaker auto production but also to lower sales in 16 of 21 industries, Statistics Canada said on Friday.

The news drove down the Canadian dollar and disappointed investors, who expected a milder 0.8 percent decrease. Factory sales rose 1.9 percent in November but struggled to gain traction overall last year.

"You can't really paint a more negative picture of Canada's manufacturing sector than what we saw with the December shipments report," said Sal Guatieri, senior economist at BMO Capital Markets.

Manufacturers have been hard hit by a strong Canadian dollar and tepid U.S. demand for their products, and they have yet to see sales climb back to pre-recession levels.   Continued...