Canadian factory sales experienced a decline in October after three consecutive months of growth, primarily due to a drop in shipments of petroleum products. According to Statistics Canada, manufacturing sales decreased by 2.8%, equivalent to approximately $52.49 billion. This decline, the sharpest since February, was slightly higher than the initial estimate of a 2.7% drop in shipments. In September, sales had increased by 0.7% after being revised upward.
October’s sales, when adjusted for price fluctuations, were 2.2% lower, indicating a decrease in the volume of goods sold. The decrease in sales can be attributed to a contraction in economic growth during the third quarter, with lower international exports and a significant decline in refined petroleum shipments. The Bank of Canada expects this subdued growth to continue before picking up again in late 2022. Additionally, the labor market has shown signs of loosening, with a slight increase in the jobless rate.
Sales of petroleum and coal products experienced a substantial decline of 10.3% in October. This can be attributed to lower crude and bitumen prices and reduced volumes of petroleum products due to maintenance work in some refineries.
Canadian Manufacturing Sector Sees Intensified Downturn in November
Sales of machinery in the Canadian manufacturing sector have experienced a decline after three consecutive months of gains. However, production of aerospace products and parts has seen an increase for the third month in a row.
The month of November witnessed a decrease in motor vehicle shipments, which coincided with auto-worker strikes in the U.S. Manufacturing sales, excluding motor vehicles, parts, and accessories, also declined by 2.6% compared to the previous month.
Inventory levels in the manufacturing sector as a whole have risen for the second consecutive month, with a 0.7% increase in October. This rise is due to higher stocks of raw materials, finished products, and goods in the process.
While unfilled orders, which are orders that can contribute to future sales if not canceled, experienced a slight increase of 0.2% in the latest month, new orders were down by 1.0%.
According to the latest survey conducted by S&P Global, the downturn in Canadian manufacturing has intensified in November. Output, new orders, and purchasing activity have all declined. The manufacturing purchasing managers’ index (PMI) fell to 47.7 last month from 48.6 in October, indicating an acceleration in the pace of contraction within the sector.
Leave a Reply