- Mark Chandler, head of Canadian FIC strategy at RBC Dominion Securities
Manufacturing sales in Canada fell more than expected in November, dropping for a second consecutive month, driven by weak auto sales, Statistics Canada reported. Factory shipments declined 1.4% to 51.53 billion Canadian dollars, the lowest level since April, whereas economists had expected a 0.7% drop. It was also the first time since March and April 2013 that Canadian manufacturing sales slumped for two straight months. October data was also revised downwards to a 1.1% fall. A slowdown in motor vehicle sales contributed the most to the monthly drop, with all auto sales posting a 5.9% fall. In addition to that, chemical manufacturers, the primary metal industry, as well as food manufacturing also posted significant declines. Some of the declines were offset by a rise in the volatile aerospace production, which rose 9.1%, with some of the gains due to the Canadian Dollar's weakness versus its US counterpart. November's inventories ticked lower by 0.1%, led by the primary metal industry.
Investors are awaiting the Bank of Canada's monetary policy decision due today. It is widely expected that the central bank will be dovish, maintaining its interest rate at 1%, as well as comment on the impact of plummeting oil prices on the Canadian economy.
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