- CIBC World Markets
Canada's manufacturing sales declined more than expected in October, dragged down by a fall in production of aerospace products, following a record increase in the preceding month. According to Statistics Canada, factory shipments dropped 0.6% to $52.7 billion following an upwardly revised 2.2% increase in September. Analysts, however, had expected a 0.4% drop. Production of aerospace products and parts plummeted by 15.6% following a 17.4% jump in September, a month when output in the sector reached a record high. The primary metals industry posted a 5.5% dip from September, when sales had risen to their highest level since October 2008. Stripping out these two sectors, overall manufacturing sales rose by 0.4% from September.
Canada's manufacturing sector is heavily dependent on exports, three-quarters of which go to the US. The gradually recovering American economy and the recent weakness in the Canadian Dollar, which makes the country's exports more competitive in global markets, will drive sustainable economic growth in Canada. Canada is a net exporter of oil, which accounts the biggest share of its total shipments. The Bank of Canada praised Canadian exports, saying that they are on the path to recovery. However, the weakness in oil prices was not obvious in October's manufacturing sales report.
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