August factory sales plummet on oil retreat
By Louise Egan
OTTAWA (Reuters) - Canadian manufacturing sales plummeted in August in the biggest setback for the sector yet this year as oil producers were hit by falling prices and temporary production slowdowns, Statistics Canada said on Thursday.
Sales at the factory gate slid 3.7 percent in August from July, the sharpest drop since December and much worse than the 1 percent decline analysts had predicted.
Producers of primary metals, autos and aerospace parts also saw their sales shrink dramatically in the month. In volume terms, sales also slid 3.7 percent and losses were widespread across most sectors and most regions of the country.
"The report was downright ugly, and paints a very bleak picture for Canadian manufacturing sector activity in August," said Millan Mulraine, economics strategist at TD Securities.
The Canadian dollar was at C$1.1937 to the U.S. dollar, or 83.77 U.S. cents, shortly after the report, down from C$1.879 to the U.S. dollar, or 84.18 U.S. cents, at Wednesday's close.
Manufacturers are hurting from the economic slowdown in the United States, the destination of three-quarters of all Canadian exports.
The U.S. housing market crash and pinched U.S. consumer spending have been especially devastating for Canada's forestry and auto industries. And with the U.S. economy headed for recession, the outlook for Canada's manufacturing base is worsening.
That could push the Bank of Canada further toward cutting interest rates at its meeting next Tuesday, even though domestic spending remains robust and a weaker currency will help take some of the sting out of exporters' woes. Continued...