August 16, 2013 / 12:48 PM / in 4 years

Canada manufacturing surprises with decline in June

Bombardier employees install parts in the cabin of a Global 6000 aircraft at the manufacturing facilities in Toronto May 29, 2012.Mike Cassese

OTTAWA (Reuters) - Canadian manufacturing sales unexpectedly fell by 0.5 percent in June, missing analysts' forecasts of an increase of that amount, and marking the fourth drop in six months, according to Statistics Canada data released on Friday.

Sales fell in 16 of 21 industries, with a 7.4 percent rise in the oil and coal product industry unable to overcome broad declines elsewhere. The volume of sales, used in calculating real gross domestic product, showed a worse picture as it fell 1.3 percent.

Of 18 economists surveyed by Reuters, 13 had predicted an increase and only two had foreseen a decline of 0.5 percent or more.

June's decline mostly reflected sales in the fabricated metal product, wood product and miscellaneous categories, the latter caused mainly by decreases in jewelry and silverware, it said.

Economists have predicted disappointing second-quarter economic growth because of floods in Alberta and a construction-worker strike in Quebec. Still, despite the floods, manufacturing sales in Alberta rose by 0.1 percent in June.

A bright spot in June was a 2.7 percent increase in unfilled orders, the sixth gain in eight months. It was due to a 6.5 percent rise in the aerospace industry, with unfilled orders there at a record C$41.6 billion ($40.4 billion).

Reporting by Randall Palmer; Editing by Bernadette Baum

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