Manufacturing sales off in December, biggest drop since 2009: StatsCan

Canadian manufacturing sales fell 3.1 per cent in December to $48 billion, the largest decline since May 2009 and worse than expected, according to Statistics Canada.

About half of the decrease reflected lower sales in the transportation equipment industry, while sales were also down in the chemical, petroleum and coal product as well as the fabricated metal product industries, StatsCan said.

“The December dip more than offsets a strong November gain and is consistent with the choppy pattern shipments data have shown throughout the year,” TD economist Jonathan Bendiner said in a research note.

He said the auto industry was the main source of weakness, as assembly sales plummeted 15.4 per cent in December.

“It is common for assembly plants to shut down temporarily in December, but today’s numbers came in much weaker than the norm for December,” Bendiner said. However, he said U.S. demand for autos is anticipated to remain strong in 2013 “which bodes well for Ontario’s auto manufacturers.”

In Ontario, overall manufacturing sales fell 4.6 per cent to $21.9 billion. The motor vehicle assembly industry was down 15.9 per cent, aerospace was down 41.2 per cent, chemical dropped 4.3 per cent, computer and electronic products fell 9.8 per cent, and motor vehicle parts fell 2.7 per cent.

In Alberta, sales fell 4.5 per cent to $5.8 billion, the third consecutive monthly decrease. The drop reflected declines in the machinery, fabricated metal product and chemical industries, which were down 16 per cent, 14.5 per cent and 4.8 per cent respectively.

Sales were also down on a seasonally adjusted basis in Newfoundland and Labrador, New Brunswick, Manitoba, and British Columbia. There were increases in P.E.I., Nova Scotia and Saskatchewan, which have relatively small manufacturing sectors, as well as Quebec.

And in Quebec, sales were up 0.7 per cent to $11.6 billion – the second-highest after Ontario – offsetting a small portion of the overall national decline. Higher production in the aerospace product and parts industry was responsible for the province’s gain.