Factory sales and net household worth drop

Tue Dec 16, 2008 11:11am EST
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By David Ljunggren

OTTAWA (Reuters) - The value of Canadian manufacturing shipments slipped in October from September, while third-quarter household net worth showed its largest drop in 10 years, reflecting the growing impact of the global financial crisis.

Statistics Canada said on Tuesday manufacturing shipments dropped 0.5 percent month to month in October, pulled lower by weaker prices for coal and petroleum products. The drop -- the third consecutive decrease -- matched market expectations.

Statscan also revised September's overall figure to a loss of 0.2 percent from an initial increase of 0.1 percent.

In another sign of trouble, the actual volume of shipments dropped by 1.8 percent from September to their lowest since December 2001.

Stewart Hall, an economist at HSBC Securities, said this spoke "loudly to the greater global economic condition and the onset of economic slowdown in Canada".

The value of petroleum and coal product sales dropped by 7.3 percent in October, largely due to a 13.5 percent drop in prices. Sales in this sector are now 18.1 percent lower than the peak reached in June 2008.

The Canadian dollar was little changed on the news but later posted modest gains.

Before the current crisis struck, manufacturers were struggling to deal with high energy prices, increased foreign competition and the stronger Canadian dollar.   Continued...