BUSINESS

Manufacturing Is Shrinking (Again) In U.S., Canada

10/16/2015 01:39 EDT | Updated 10/16/2016 05:12 EDT
Mint Images - Frans Lanting via Getty Images
Lumber mill, British Columbia, Canada

OTTAWA — Manufacturing is on a downward swing in North America.

Canadian manufacturing sales fell in August, StatsCan said, following three consecutive monthly increases, but the decline was less than economists had expected.

Meanwhile, U.S. manufacturing production fell for the second straight month in September as factories cranked out fewer appliances, computers, and electronics.

The Federal Reserve says factory output declined 0.1 per cent, following a drop of 0.4 per cent in August. Manufacturers also cut back on production of steel and other metals.

Statistics Canada said Friday manufacturing sales slipped 0.2 per cent to $52.1 billion in August due to a drop in the petroleum and coal industry as well as the auto parts and aerospace product and parts industries.

However gains were made in motor vehicle assembly and wood products.

Economists had expected a larger drop of 1 per cent in Canadian manufacturing sales, according to Thomson Reuters.

The decline suggests that a strong U.S. dollar, weak overseas economies, and cautious U.S. consumers are holding back factory output. Many companies are also focused on reducing stockpiles that were built up in the spring by cutting back on orders for new goods.

Overall U.S. industrial production, which includes mining and utilities, fell 0.2 per cent, also its second straight decline. Mining output plunged 2 per cent as energy companies sharply reduced oil and gas drilling. Utility output rose 1.3 per cent.

In Canada, sales were down in eight of 21 main industries tracked, representing approximately half of the sector.

The petroleum and coal product industry saw sales fall 5.2 per cent to $5.1 billion due to a drop in prices and the volume in products sold.

Auto parts sales dropped 4.4 per cent to $2.5 billion, while the aerospace product and parts industry fell 3.5 per cent to $1.9 billion in August.

Motor vehicle assembly sales rose 6.7 per cent to $5.7 billion, following maintenance shutdowns in July, while wood product sales were up 5.1 per cent to $2.2 billion.

Sales declined in five provinces in August including lower results in Quebec, Alberta and New Brunswick, offset in large part by gains in Ontario.

Quebec fell 1.2 per cent, while Alberta dropped 1.9 per cent. New Brunswick decreased 7.1 per cent. Ontario sales rose 1.1 per cent.

— This story combines two reports from The Canadian Press