December 14, 2012 / 1:37 PM / 5 years ago

UPDATE 1-Canadian manufacturing sales plunge, confirm weak trend

* Sales fall 1.4 pct vs estimate of no change

* Motor vehicles, primary metals post big drops

* Data confirm Canadian economy struggling to advance

OTTAWA, Dec 14 (Reuters) - Canadian manufacturing sales unexpectedly plunged by 1.4 percent in October from September, the biggest drop in nine months, on weakness in major sectors such as motor vehicles and primary metals, Statistics Canada data indicated on Friday.

The strikingly weak report follows other recent figures confirming the economy is struggling to make much progress amid challenges such as market problems in Europe and the United States and the effect of the strong Canadian dollar.

Analysts had expected no change in manufacturing sales.

The October drop was the greatest since the 2.4 percent retreat recorded in January 2012 and Statscan revised September’s performance to unchanged from an initial 0.4 percent increase.

October sales declined in 12 of 21 industries, representing about 71 percent of the manufacturing sector. In volume terms, sales were down 2.4 percent, the biggest decline since the 2.7 percent recorded in January 2012.

Sales in the motor vehicle assembly industry dropped by 3.7 percent to C$4.4 billion ($4.5 billion) while primary metals sales were down 2.8 percent to C$3.7 billion. The declines were partly offset by advances in the petroleum and coal product industry, where sales rose by 2.0 percent to C$7.4 billion.

The October data, which were weak across the board, showed the inventory-to-sales ratio advanced to 1.36 from 1.32 in September while inventories grew by 1.3 percent. Unfilled orders were flat while new orders fell by 0.6 percent.

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