The federal government announced on Friday that manufacturing sales dropped 0.4 percent in September, falling slightly short of analysts’ expectations.
The value of the Canadian manufacturing sales fell to C$50.8 billion.
Canadian auto manufacturers saw a 5.1 percent plunge in sales last month following the demise of several auto-assembly plants. The sector has been significantly impacted by the global trade tensions.
“The continued drop in auto sales is symptomatic of a broader issue that is impacting auto manufacturing globally, rising input costs, as a result of the 232 tariffs imposed by the Trump administration,” Komali Capital Investment Counsel CEO Ralph Grantham said in a note.
September’s decline marks the second consecutive month that manufacturing sales have fallen.
The country’s statistics agency said a weaker Canadian dollar and an increase in orders by manufacturers were largely to blame for the decline.
Canada’s economic growth in the third quarter is predicted to come in at 1.5 percent versus an estimate of 1.8 percent, according to the Bank of Canada.
Canada’s chief statistician, Wayne Smith, said of the preliminary September results: “Factors that could have contributed to the decrease include a likely increase in imports to react to changes in foreign exchange, less selling space for businesses due to construction projects, and weaker production at two general industries.”
A gauge of domestic demand also suggested the industry could be headed for more weakness. The gauge, called the Ivey Purchasing Managers Index, fell to a reading of 52.9 in October, its lowest level since July.
“Weakness in foreign demand has continued to weigh on sales, as have disruptions in the assembly sector,” Ivey said in a release.
The Canadian dollar had the worst month of the year in September, as investors increased their bets on higher U.S. interest rates.
The Canadian dollar settled at C$1.2615 per U.S. dollar on Thursday, about 1.3 percent lower than the month before.
(END) Dow Jones Newswires
October 12, 2018 08:14 ET (12:14 GMT)
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