Drop in autos leads surprise decline in Canadian manufacturing
By Erik HertzbergBloomberg
Tues., June 18, 2019timer1 min. read
Factory production unexpectedly fell in Canada on a temporary slowdown in the auto sector.
Manufacturing sales fell 0.6 per cent in April, Statistics Canada said Thursday from Ottawa. Economists surveyed by Bloomberg were expecting factory output to increase 0.4 per cent.
The pullback follows a revised 2.6 per cent gain in March, which was the largest since the end of 2017. In volume terms, sales fell 0.8 per cent.
Slowing output in the transportation sector was the primary drag, declining 6.7 per cent. Motor vehicle production fell 8.9 per cent, mostly due to "temporary plant shutdowns and fewer units assembled," according to Statistics Canada.
The nation's economy is emerging from two quarters of stagnant growth, but Tuesday's report may shake confidence in a quick return to form. The Bank of Canada, which has indicated interest rates are on hold even as the Federal Reserve weighs a cut, expects output to pick up in the second half of this year.
April's sales drop, however, was somewhat isolated. Output fell in just eight of 21 industries, and excluding the auto sector factory production rose 0.5 per cent. Inventories increased 1.3 per cent, led by petroleum and coal, bringing the inventory to sales ratio to 1.53 — the highest since 2009.