Factory and Wholesale Slump Confirms Canadian Economic Slowdown
Canadian manufacturers and wholesalers
recorded sharply lower sales in November, adding to evidence the
nation's economy entered a soft patch at the end of last year.
Wholesale sales dropped 1 percent in November, the biggest one
month decline for the sector since March 2016, Statistics Canada
reported in Ottawa on Tuesday. Factory sales were down 1.4
percent, the largest drop since January. Both sectors also
recorded declines in volumes.
The data confirm Canada's expansion has likely entered what
economists believe is a temporary slowdown that is expected to
last through the first few months of this year, amid a slump in
the country's oil sector and overall weakening in global
The Bank of Canada estimates quarterly growth probably slowed to
an annualized pace of 1.3 percent in the fourth quarter of 2018
and will drop even further in the first three months in 2019 to
below 1 percent.
The slowdown prompted central bank policy makers at their last
rate decision earlier this month to indicate less urgency for
further interest rate increases.
The weakness in wholesale was broad-based, and larger than what
economists had been anticipating. Five of seven wholesale
subsectors recorded declines in November. Economists had been
anticipating a 0.3 percent drop for the month.
The manufacturing picture was more mixed, with 13 of 21
industries recorded declines. Refinery sales led declines, with
a 14 percent drop on the back of lower prices and due to lower
production resulting from maintenance work. The monthly drop in
refinery sales was the largest since January 2015.
Economists had forecast factory sales would drop 1 percent.
©2019 Bloomberg L.P.