Canadian factory sales fell at the fastest pace in more than three years in April, a widespread drop led by slower oil-refinery production and metal output.
Sales dropped 2.4 percent to C$48.2 billion ($47.4 billion), Statistics Canada said today in Ottawa, while inventories rose to the highest in records dating to 1992. The Canadian dollar declined as the report contradicted economists who forecast a 0.3 percent gain.
The fourth sales decline in five months underscores the inconsistent global demand that has stalled factory orders for more than a year. The Bank of Canada predicts the economic expansion will rotate to exports and investment from consumer and government spending even amid what it calls the slowest export recovery since World War II.
“The month’s factory sector weakness suggests April gross domestic product could eke out at best an only mild gain,” said Emanuella Enenajor, an economist at Canadian Imperial Bank of Commerce in Toronto. Some of the April decline should be made up when refinery production returns to normal, she said.
Petroleum and coal sales dropped 8.8 percent to C$6.26 billion, the lowest since June 2011, Statistics Canada said. “Some refineries reported that either maintenance or the switch to summer fuels required production to be slowed or halted for a longer than normal period,” according to the agency’s report.
Primary metal sales dropped 8.7 percent to C$3.43 billion in April, the lowest since May 2010. Receipts fell in 13 of 21 categories tracked by Statistics Canada, accounting for 86 percent of production.
The Canadian dollar fell 0.2 percent to C$1.0175 per U.S. dollar at 9:26 a.m. in Toronto. It reached C$1.0148 yesterday, the highest since May 15. One dollar buys 98.28 U.S. cents. Government bond yields declined, with the five-year security falling 3 basis points to 1.53 percent.
Sales excluding motor vehicles and parts decreased 2.5 percent to C$41.9 billion, Statistics Canada said.
Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales fell 1.6 percent.
Unfilled orders fell 0.1 percent to C$70.9 billion, still the fourth highest total on record. New orders fell 0.9 percent to C$48.1 billion.
Inventories rose 0.6 percent to C$69 billion, the fourth straight increase. The ratio of factory stockpiles to sales increased to 1.43 from 1.39, the highest since October 2009.
From a year earlier, factory sales fell 3.3 percent in April, Statistics Canada said.
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