The decline in Canadian factory sales in August followed two months of 1.7 per cent increases, and lowered sales to $52.1-billion from $52.2-billion, Statistics Canada reported.Fred Lum/The Globe and Mail
Canadian factory sales declined by 0.2 per cent in August, and the first decline in four months was smaller than economists forecast with damage from falling energy prices curbed by gains for auto makers.
The decline followed two months of 1.7 per cent increases, and lowered sales to $52.1-billion from $52.2-billion, Statistics Canada reported Friday from Ottawa. Economists forecast August sales would decline by 1 per cent according to the median of a Bloomberg survey with 18 responses.
Factory sales remain below a peak of $53.7-billion set in July 2014, evidence manufacturers have yet to reap the full benefit of the Canadian dollar's 10 per cent decline this year and increasing demand from the U.S.
The persistent weakness is an issue in Canada's Oct. 19 election, with Prime Minister Stephen Harper touting balanced budgets, free trade agreements and reduced taxes as benefits to the industry. Liberal Leader Justin Trudeau has taken a lead in recent polls on Harper in part with calls to boost growth with deficit spending on infrastructure.
Petroleum and coal sales fell 5.2 per cent to $5.11-billion as prices declined by 4.7 per cent, taking the drop over the 12 months through August to 27.9 per cent. Aerospace sales also fell by 3.5 per cent to $1.90-billion and machinery sales by 1.7 per cent to $2.82-billion.
The Bank of Canada says the economy will rebound in the second half of this year as momentum rebuilds following an oil shock that shrank output in the first and second quarters. The main evidence of that kind of strength in today's report came from the 6.7 per cent gain in motor vehicles to C$5.67-billion, for a 12-month gain of 23.9 per cent.