Manufacturing Sales Decline in August, Erase Previous Gains

(The Canadian Press)

The Canadian manufacturing sector is getting weaker and a prolonged slump in the United States threatens the industrial economies of Ontario and Quebec as well as resources-producing provinces in Western Canada, says a bank report released Thursday.

The TD Bank report said the economies of manufacturing-heavy provinces will likely shrink by one per cent in inflation-adjusted terms this year and fare only slightly better next year as exports of everything from autos and auto parts to lumber, machinery and furniture continue to get squeezed by the U.S. recession.

The TD report came after Statistics Canada reported that Canadian manufacturing sales declined 3.7% to $52 billion in August, erasing most of the gains from the previous two months.

The largest contributor to the decrease was the petroleum and coal products industry, where sales have fallen by nearly $1 billion in two months.

TD Bank said it expects a U.S. recession won't be short and will impact all parts of the Canadian economy – the industrial companies in central Canada as well as the grain, minerals and energy sectors of the West.

“With U.S. consumers only beginning to retrench in their spending and clean up their household balance sheets, it would be too optimistic to expect a sharp recovery in the next few quarters,” the TD report said.

Read the complete article here. Summary statistics and a link to the data files are on the Statistics Canada website at here.