Canadian manufacturing sales dipped 0.2% in August following a 1.7% surge in July and an upwardly revised 0.2% increase (previously reported as a 0.1% drop) in June. Figures released this morning by Statistics Canada also show that most of the weakness was concentrated in sales of non-durable products which together declined 0.7% in August.
The agency says weakness among non-durable components was broadly-based with only a 1.0% rise in petroleum & coal sales providing notable partial offset. Sales of durable goods rose 0.4% despite a 2.5% drop in motor vehicle sales and a 22.6% plunge in "miscellaneous" goods. Sales of primary (3.0%) and fabricated (1.1%) metal products as well as a 17.8% surge in the volatile aerospace component provided the main sources of strength.
Controlling for the impact of prices, the volume of sales declined 0.3% in August. This only partially retraced a 1.1% gain in July that followed a sizable, but upwardly revised, 0.6% decline in June (previously reported as -0.9%). Inventories rose 0.3%, matching the pace of growth in July.
"We expect," declared experts at RBC Economics, "offset from a further recovery in mining and construction activity in August as rebuilding/repair continues after severe flooding in Alberta in June.
"As well," the bank concludes, "reports on retail and wholesale trade out next week will provide further indications about the strength of service sector output in August. Data released to-date, however, are consistent with overall GDP growth of 0.2% in the month which would be slightly below our prior assumption for a 0.3% gain."
