Canadian factories eke out gains despite loonie pain
By Louise Egan
OTTAWA (Reuters) - Canadian manufacturing held its ground in October despite the pain from a lofty currency, while other data showed inflation pressures easing, leaving expectations intact for a central bank rate cut in January.
Manufacturing sales outperformed expectations, rising 0.1 percent in October as strong sales in aerospace and other sectors offset weakness in the auto industry, Statistics Canada said on Thursday.
Analysts in a Reuters survey had expected factory sales to decline by 1 percent.
"Overall, this was a very strong report, suggesting that there still remains some life in the Canadian manufacturing sector, despite the strength of the Canadian dollar and the slowing U.S. economy," said Millan Mulraine, economics strategist at TD Securities said in a note to clients.
"The big gain in real shipments will also have important upside implications for fourth-quarter GDP in Canada."
However, manufacturing was largely to blame for mediocre labor productivity growth of 0.2 percent in the third quarter, compared with 1.6 percent in the United States, according to a separate Statscan release.
"This is the ugly underbelly to the incredibly strong job growth figures churned out month after month in recent years," said Doug Porter, deputy chief economist at BMO Capital Markets.
The productivity update also revealed a slower rate of growth in labor costs in the third quarter of 0.3 percent, down from 0.7 percent in the second quarter. Continued...