Canadian manufacturing sales decline sequentially in December

Canada’s manufacturing sales fell in December. On a sequential basis, manufacturing shipment dropped 0.3 percent, as opposed to the 0.3 percent rise expected by markets. After accounting for price changes the sales volume dropped 0.1 percent on the month. Revisions to the earlier data were mixed. The November data was upwardly revised, with nominal sales now reported as 3.8 percent rise and real sales up 3 percent, but earlier months figures were revised down.

Durable goods rose 0.7 percent in nominal terms and 0.9 percent in real terms, with solid gains seen in electronics, machinery, electrical equipment, and transport equipment. But the gain was more than countered by a fall in nondurables, which dropped 1.3 percent in both nominal and real terms, led by food, petroleum, non-metallic minerals, and chemicals.

Region wise, manufacturing sales fell in provinces except Manitoba, Ontario and Alberta. Declines were mainly seen in energy producing Saskatchewan, Newfoundland, Quebec and New Brunswick.

Inventories rose 0.1 percent sequentially, with the inventory-to-sales ratio rising slightly to 1.36. Forward looking indicators came in mixed with new orders rising 0.3 percent while unfilled orders dropped 0.7 percent.

The sharp rise in November, related to a recovery in automotive shipments after the October shutdowns, was not expected to carry on through the year-end. However, the performance was still slightly disappointing, with the value and volumes of shipments falling slightly and almost half of all industries recording declines. Therefore, the weaker than expected performance, and downward revisions the GDP tracking for fourth quarter has been lowered by about 0.2 percentage points to 2 percent, said TD Economics.

“On the whole, we remain cautiously optimistic for the Canadian manufacturing sector”, stated TD Economics.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was neutral at -1.85574, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -85.276. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest