The slump continues in a key sector of our economy, according to figures released this morning by Statistics Canada.
Canadian manufacturing sales declined by 0.5% in June, below market expectations for a 0.3% increase, following a 0.6% increase (revised from 0.7%) in May and a 2.3% (was 2.1%) drop in April. It was the fourth downward month in the last six.
Weakness was broadly-based across components with 16 of 21 industries posting declines. The greatest sources of weakness were a 6.5% drop in fabricated metal sales and a 20.2% plunge in the "miscellaneous industry." Offsets were provided by 7.4% and 10.1% jumps in the often volatile petroleum and coal and aerospace components, respectively.
The rise in the petroleum and coal component reportedly reflected refineries increasing production following slowdowns for maintenance work in prior months. This was enough to offset any negative impact that flooding in Alberta may have had on refining activity in that province in the month.
"Weakness in manufacturing sales in June is disappointing," according to experts at RBC Economics, "particularly given that little of the weakness appears to have been the result of temporary disruptions due to severe flooding in Alberta in the month. The impact from this factor may be more evident in the mining component of GDP.
"Along with a drop in construction activity caused by a strike in Quebec, the expected decline in mining activity and today's weakness in manufacturing are consistent with our expectation that GDP fell by 0.3% in June, down from a 0.2% gain in May."
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