NEWS
12/15/2016 07:51 EST | Updated 12/16/2017 00:12 EST

Statistics Canada says manufacturing sales fell 0.8 per cent in October

OTTAWA — Canadian factory sales unexpectedly fell in October, hurt by the primary metal, petroleum and coal product and machinery industries.

Statistics Canada said Thursday that manufacturing sales fell 0.8 per cent to $51.0 billion in October.

Economists had expected a gain of 0.4 per cent for the month, according to Thomson Reuters.

Constant dollar sales fell 1.7 per cent in October, reflecting a lower volume of manufactured goods sold.

"The sharp pull-back in manufacturing sales in October is likely to weigh on GDP growth in the month," Royal Bank senior economist Nathan Janzen wrote in a report.

"Reports on retail and wholesale trade next week will provide further clarification but our monitoring of data available to-date is pointing to a potential 0.1 per cent pull-back in GDP in October that would partially retrace the stronger-than-expected 0.3 per cent increase in September."

David Watt, chief economist at HSBC Bank Canada, said the decline in factory sector sales for October reinforced the idea that Canada and the United States are in different stages of their economic cycles.

"Hence, while the Federal Reserve hiked rates yesterday and faces an economy with little slack, the Bank of Canada still faces an economy with quite a bit of slack and showing few signs of a long-awaited rebalancing," Watt wrote in a report. 

Statistics Canada said sales fell in 15 of the 21 industries tracked. Durable goods fell 1.1 per cent, while non-durable goods sales dropped 0.4 per cent.

Primary metal manufacturing sales fell 2.4 per cent in October to $3.6 billion due in large part to non-ferrous metal production, and iron and steel mills and ferro-alloy manufacturing.

The petroleum and coal product industry also saw sales fall 1.7 per cent to $4.3 billion due to lower volumes, as maintenance and turnaround work at some operations also lowered production.

The aerospace product and parts industry gained 5.3 per cent.

Sales fell in seven provinces for the month as Ontario, Quebec and Alberta posted the largest declines.

Ontario sales fell 0.8 per cent to $25.0 billion, while Quebec dropped 1.2 per cent to $11.7 billion. Manufacturing sales in Alberta lost 2.0 per cent at $5.2 billion.