Bloomberg News

Canada Factory Sales Fall Most Since May 2009 on Auto Slowdown

February 15, 2013

Canadian factory sales fell 3.1 percent in December, the most since May 2009, as car assembly plants experienced longer-than-usual seasonal shutdowns, government figures showed.

Sales dropped to C$48.0 billion ($47.9 billion) from C$49.6 billion the previous month, Statistics Canada said today in Ottawa. The decline was larger than the most pessimistic forecast in a Bloomberg News survey of 17 economists that had a median estimate of a 0.8 percent decline.

The need to raise borrowing costs to head off inflation is less urgent than policy makers previously thought because the economy will take longer to reach full output, Bank of Canada Governor Mark Carney said Jan. 23. Employers cut 21,900 workers from payrolls in January, Statistics Canada said Feb. 8, as a tepid global recovery crimps exports and record household debt levels curb consumer spending.

Sales declined in 16 of 21 categories tracked by Statistics Canada, accounting for 82 percent of production.

More than half the decrease was due to a drop in transportation equipment, according to Statistics Canada. A majority of the decline came in Ontario, where sales dropped 4.6 percent.

Statistics Canada said that while car plants are often shut in December, “the reduction in production was greater than usually observed.”

Excluding automobiles, factory sales fell 1.8 percent to C$42.3 billion in December, Statistics Canada said.

Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales fell 3.8 percent in December, the most since May 2009 when the country was in recession.

From a year earlier, sales dropped 3.9 percent. New orders declined in December by 4.4 percent from a month earlier to C$49.7 billion.

Canadian factory inventories fell 1.0 percent to C$64.5 billion in December, with the ratio of factory stockpiles to sales increasing to 1.34 from a revised 1.32.

To contact the reporter on this story: Andrew Mayeda in Ottawa at

To contact the editor responsible for this story: Chris Wellisz at

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