"Manufacturing has stagnated in 2013 and not much positive momentum should be expected over the balance of the year as the prospects of a healthy recovery in the U.S. into the fourth quarter look precarious"
-Mazen Issa, an economist with TD Securities
A sharp drop in manufacturing sales in August is likely to dampen economic growth over the same period, as the outlook for manufacturing sector still remains murky in light of political tensions in Canada's top market, the United States. Statistics Canada said Wednesday the nation's manufacturing sales slipped 0.2% in the last month of summer, reversing three straight months of gains. The figure is below the 1.7% rise in July, and much weaker than a 0.3% increase predicted by analysts. Sales added only $49.5 billion for the month, with sales falling in miscellaneous, food and motor vehicle assembly industries. Meanwhile, the volume of sales, which is used in calculating economic output plunged 0.3%.
The pace of growth in the Canadian economy has been disappointing so far, according to Bank of Canada Governor Stephen Poloz. He already acknowledged his upbeat-sounding speeches in causing market confusion over the central banks economic outlook that is needed to be corrected. During the press conference after a G20 meeting, Poloz pointed out the economy is at a tipping points from improving confidence into expanding capacity, while two weeks later Senior Deputy Governor Tiff Macklem cut the central bank's Q3 growth forecast. After a 0.6% expansion seen in July, August growth figures may disappoint markets due to the latest fundamental data.
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