Manufacturing sales fell more than expected in January

Statistics Canada says manufacturing sales fell 1% in January, with the decline led by the motor vehicle, aerospace and primary metal industries.

Economists had expected a drop of 0.8%, according to Thomson Reuters.

Sales for January totalled $54.9 billion, as 14 of the 21 industries moved lower. The drop came as sales of motor vehicles fell 8% to $4.9 billion, following two consecutive monthly increases.

Meanwhile, production in the aerospace product and parts industry fell 9.5% to $1.6 billion, while the primary metal industry dropped 2.8% to $4.1 billion.

Overall manufacturing sales in volume terms declined 1.1%.

“Canadian factories had a rough start to the year,” says Royce Mendes, director and senior economist at CIBC, in commentary.

“The export data we already had in hand suggested a deterioration of this magnitude,” he says, so the news wasn’t a surprise. However, “The survey suggests that GDP data could look soggy to open the new year,” especially with “already elevated inventory levels and capacity constraints” potentially limiting the gains of U.S. tax reform for factories.

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.