Canada Factory Sales Unexpectedly Decline 0.4% in October

Canadian manufacturing sales unexpectedly dropped in October, with the automobile sector acting as a major drag on results. Excluding motor vehicles and parts, shipments rose.

Factory sales fell 0.4% in October to a seasonally adjusted 53.49 billion Canadian dollars (US$41.77 billion), Statistics Canada said Friday. The consensus among traders was for a robust 1% gain, according to economists at Royal Bank of Canada.

Write to Paul Vieira at paul.vieira@wsj.com

OTTAWA--Canadian manufacturing sales unexpectedly dropped in October, with the automobile sector acting as a major drag on results. Excluding motor vehicles and parts, shipments rose.

Factory sales fell 0.4% in October to a seasonally adjusted 53.49 billion Canadian dollars ($41.77 billion), Statistics Canada said Friday. The consensus among traders was for a robust 1% gain, according to economists at Royal Bank of Canada. Expectations in Canada were supported by decent domestic trade data issued last week, and a strong gain in U.S. industrial output.

On a volume or price-adjusted basis, manufacturing sales dropped in October by a steeper 1.5%.

On a one-year basis, nominal factory sales advanced 4.3%.

The data agency said the decline was mostly due to weaker sales of motor vehicles and other transportation equipment. The agency added some auto-assembly plants were closed in the month -- likely a reference to a strike at a General Motors Co. sport-utility factory in Ingersoll, Ontario that was later settled.

Motor-vehicle shipments fell 6.7% to C$4.56 billion in October, and declined 18.3% on a one-year basis. Excluding shipments of motor vehicles and parts, Canadian factory shipments climbed 0.3% in the month.

Sales drops were also recorded in the chemical products sector, down 1.1%, and machinery, down 1.4%.

Offsetting the declines was a 2.2% rise in sales of petroleum and coal products, to C$5.54 billion.

Factory stockpiles rose 1.6% to C$74.77 billion. An increase in inventories could suggest that production outstripped demand.

There were some bright spots in two closely-watched forward-looking indicators. Unfilled orders, or the stock of orders that will contribute to future sales assuming they aren't canceled, rose 2.4% in October, or the biggest one-month gain in over two years. New orders surged 5.3%, or the largest advance in 18 months.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

December 15, 2017 08:58 ET (13:58 GMT)