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Manufacturing sales down in April: Statistics Canada

Third drop in four months driven by aerospace and parts


OTTAWA: Manufacturing sales declined for the third time in four months in April, falling 0.8% to $49.1 billion and missing expectations for a slight gain, Statistics Canada.

The national agency said the biggest drops came in the aerospace products and parts industry, down 34%.

Also among the leading decliners was the petroleum and coal products sector, off 4.9%, largely due to temporary shutdowns at some refineries.

On the bright side, sales of motor vehicles rose 9% to their highest level since November 2007, although the economic analysis arm of TD Bank said current strength in the auto sector was “not likely sustainable.”

Statistics Canada said sales fell in 13 of 21 industries, representing approximately 45% of the manufacturing sector.

Sales of durable goods decreased 0.7%, while non-durable goods sales declined 1%.

In constant dollars, sales declined 0.6% in April, reflecting reduced volume.

CIBC Economics said in a commentary that the numbers raise doubts about whether gross domestic product in April will “spring forward as robustly as some had been hoping.”

However, the bank said it was still waiting on a number of data points, including wholesale and retail numbers coming out next week, before solidifying its view.

TD Economics, its commentary, noted that the declines were fairly widespread, led by the volatile aerospace sector, which had seen robust gains the previous two months.

Meanwhile, TD said forward-looking indicators were not encouraging, with unfilled orders flat on the month and new orders falling 3.2%, partly due to a drop in the aerospace sector.

“The manufacturing sector got off to a weak start in the second quarter, which does not bode well for overall economic growth,” TD said.

It added that the sector will continue to face strong headwinds in the near term as economic activity around the world has slowed, confidence has soured and the Canadian dollar remains elevated.

“Still, once there is a little more certainty surrounding the debt crisis in Europe and economic activity picks up pace later this year – particularly in the US. – the manufacturing sector should benefit,” it said.

© 2012 The Canadian Press