BUSINESS

Canadian Factory Sales Unexpectedly Tumble In September: StatsCan

11/16/2015 12:23 EST | Updated 11/16/2016 05:12 EST

OTTAWA — Factory sales in Canada tumbled in September as the country's auto assembly plants reported a sharp drop in sales after four months of gains.

Manufacturing sales fell 1.5 per cent to $51.1 billion in September, following a 0.6 per cent drop in August, Statistics Canada said Monday.

Economists had expected an increase of 0.1 per cent, according to Thomson Reuters.

The drop came as the motor vehicle assembly industry saw sales fall 10.3 per cent to $5.0 billion in September.

factory sales

Manufacturing sales in Canada have been very volatile since the oil price collapse, but overall, sales are down from a peak last year. Source: StatsCan

TD Bank economist Brian DePratto said the September data provides a weak starting point for the fourth quarter.

"However, a pullback in motor vehicle manufacturing was to be expected given the very strong performance in recent months that resulted in part from the resumption of output at a major manufacturing facility,'' he said.

"For the third quarter of this year, manufacturing is expected to be a significant source of growth given its strong performance for the quarter overall.''

On a constant dollar basis, manufacturing sales were down 1.6 per cent, indicating that the volume of goods sold was lower.

Statistics Canada said the decline was due to a drop in the motor vehicle assembly and the petroleum and coal product industries.

Sales were down in 13 of 21 industries tracked.

The petroleum and coal product industries were down 7.1 per cent to $4.8 billion due in part to partial shutdowns at a number of refineries for maintenance work.

Statistics Canada said although refineries often close for part of September, this year the shutdowns were more extensive than usual.

Partially offsetting the losses were gains by the machinery and primary metal industries. The machinery industry saw sales rise 9.6 per cent to $2.9 billion, while primary metal sales gained 4.3 per cent to $3.8 billion.

Four provinces saw sales fall in September, with Ontario, home to the country's big auto plants, posting the largest drop as it fell 2.5 per cent.