Canadian factory sales fell in June, the fourth decline in six months, as petroleum and coal were diminished by lower prices and refinery shutdowns.
Sales fell 0.4 percent to C$48.9 billion ($49.5 billion), Statistics Canada said today in Ottawa, while economists in a Bloomberg News survey with 18 responses forecast a 0.3 percent gain. The agency today also said May sales were unchanged, compared with its earlier reading of a 0.4 percent decrease.
Canada is in the slowest export recovery since World War II because of weak global demand and the drag of a currency trading near parity with the U.S. dollar, the Bank of Canada said last month. Finance Minister Jim Flaherty said yesterday the economy is operating below its potential because of challenges abroad such as Europe’s debt crisis, a weak recovery in the U.S. and slowing growth in emerging markets.
“The manufacturing sector has struggled this year, and will continue to do so over the balance of the year as the global growth backdrop is expected to remain subdued,” said Mazen Issa, Canada macro strategist at TD Securities in Toronto.
Sales of petroleum and coal products fell 10.6 percent to C$5.76 billion in June, and have dropped 23 percent since a peak in March, Statistics Canada said. Excluding that industry sales rose 1.1 percent in June.
The price of Western Canada Select oil dropped 47 percent between a peak on May 1 and June 28, when it reached $49.69 a barrel, the lowest since September 2010.
Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales rose 0.1 percent in June, Statistics Canada said. Sales rose in 12 of 21 categories tracked by Statistics Canada, accounting for 60 percent of production.
Transportation equipment sales rose 1.7 percent to C$9.20 billion, the highest since November 2007. Motor vehicle sales rose for the 11th time in 12 months in June, posting a 0.7 percent gain.
Canada’s dollar rose 0.1 percent to 98.80 cents per U.S. dollar at 11:57 a.m. in Toronto, the strongest level since May 4. One Canadian dollar buys $1.0122. The yield on the benchmark 10-year Canadian government bond was unchanged at 1.95 percent.
Toyota Motor Corp. (7203) said July 24 it will raise production of Lexus RX sports-utility vehicles at one of its Canadian plants to counter the effects of a rising yen. Asia’s largest automaker plans to invest C$100 million and add about 400 jobs at its Cambridge, Ontario, plant, increasing RX capacity by 30,000 vehicles annually to 104,000 by 2014, the Toyota City, Japan- based automaker said.
Sales excluding motor vehicles and parts decreased 0.6 percent to C$42.2 billion, Statistics Canada said.
Unfilled orders rose 2.2 percent to C$64.3 billion in June, while new orders rose 1.7 percent to C$50.3 billion.
Inventories fell 1.7 percent to C$64.8 billion, with the ratio of factory stockpiles to sales falling to 1.32 from 1.34.
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