MNI 5 THINGS: Canadian Mfg Sales -1.0% on Weak Durables>

--5 Things We Learned From the Canadian Monthly Manufacturing Survey

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the January 

data on the Canadian manufacturing sales released Friday by Statistics 

Canada: 

     - Sales decreased 1.0%, roughly in line with expectations. December 

was revised up but still down 0.1% versus -0.3% initially reported. Real 

sales, more relevant to GDP, fell 1.1%, indicating January's weakness 

was not a price story but reflective of weaker activity. Overall the 

report supported a growth slowdown scenario. 

     - Sectorwise, 14 of 21 industries posted lower sales, representing 

56% of manufacturing trade, led by durable goods (-3.5%), while 

non-durable manufacturing was up 1.7%. The biggest drag was from autos 

and aerospace. Sales excluding autos and parts edged down just 0.1%. 

     - The Bank of Canada likely won't welcome the 3.1% decline in 

machinery, especially since it is mostly volume related (-2.8%), as it 

sends a negative signal for investment activity, which is facing 

headwinds from NAFTA-related uncertainties. 

     - Forward-looking indicators were encouraging on the surface, with 

unfilled orders up 0.6% and new orders up 0.1%. However, much of it was 

related to the volatile aerospace industry. Excluding aerospace, 

unfilled orders actually contracted 0.6% and new orders fell 2.3%, the 

largest drop since June 2017. 

     - Accompanying the sales decline, inventories rose 0.9% to a record 

C$76.1 billion, not an encouraging sign for production activity. The 

inventory-to-sales ratio rose to 1.39 from 1.36. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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