December factory sales in record plunge

Mon Feb 16, 2009 2:09pm EST
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By David Ljunggren

OTTAWA (Reuters) - The value of Canadian manufacturing shipments plummeted a record 8.0 percent in December from November in yet another stark sign of how the global crisis is battering Canada.

The drop -- the fifth consecutive month-on-month decrease -- was far steeper than the 5.3 percent fall predicted by analysts and was the worst since Statistics Canada adopted its current method of calculating the data in January 1992.

Statscan released the data on Monday and slightly revised November's month-on-month fall to 6.2 percent from an initial plunge of 6.4 percent.

Recent Canadian economic numbers have been little short of calamitous. Job losses in January were the biggest on record while sales of previously owned homes last month were 41 percent down from a year earlier.

As if that were not bad enough, Canada posted its first trade deficit in almost 33 years in December.

Finance Minister Jim Flaherty told Reuters in Rome on Saturday that "I expect the numbers of all kinds to continue getting worse month after month this year."

The gloomy statistic helped cement analyst predictions that the Bank of Canada would once again trim rates early next month. The central bank has cut its key rate by 350 basis points since December 2007 to a 50-year low of 1 percent.

"(This) lends support to a further 50 basis points cut by the Bank of Canada on March 3," said Derek Holt and Karen Cordes of Scotia Capital Research.   Continued...