Canada manufacturing outlook worsens: survey

Tue Jan 29, 2008 9:42am EST
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OTTAWA (Reuters) - Canadian manufacturers reported the bleakest outlook on production since 2002 as they struggle with a high Canadian dollar, high oil prices and the U.S. slowdown, according to a Statistics Canada survey on Tuesday.

Thirty-three percent of the 3,000 companies participating in the quarterly survey saw production volumes declining in the next three months, up from 24 percent in the previous quarter. The number expecting higher output fell to 19 percent from 24 percent.

The balance of opinion -- the difference between the two percentages -- therefore fell sharply to -14. Statscan said that was the most negative balance of opinion since a report of -23 in January 2002.

Manufacturers producing durable goods were much less upbeat than their counterparts producing non-durable goods, the survey showed.

Manufacturers' outlook on hiring also worsened in the quarter, with 21 percent seeing a decrease in employment compared with 18 percent in the final quarter of last year.

But their satisfaction with new orders, unfilled orders and inventories improved and only 28 percent reported production difficulties, down from 36 percent in the last survey.

The economy lost 132,000 factory jobs last year as the currency pressures and deteriorating U.S. demand forced plant closures or restructuring.

The Canadian dollar rose by 17.5 percent in value last year, hitting a modern-day high of over US$1.10 in November before receding.

(Reporting by Louise Egan; Editing by Renato Andrade)