MNI DATA IMPACT: Canada August Factory Sales +0.8% on Autos>

By Greg Quinn and Anahita Alinejad

     OTTAWA (MNI) - Canadian factory sales climbed for the first time in 

three months as motor vehicle assembly plants resumed work after summer 

shutdowns, while a measure of inventories held close to the highest 

since the last recession a decade ago.

     Sales rose 0.8% from July, in line with the MNI median for a 

0.7% increase. Sales had declined 1.3% in July and 1.5% in June, 

months marked by shutdowns at auto plants, metalworks and energy 

facilities. 

     Motor vehicle sales climbed 2.6% in August following declines of 

4.6% in July and 0.3% in June, Statistics Canada said Thursday from 

Ottawa. Fabricated metal sales also rose for the first time in three 

months with a 3.6% gain that may reflect the return of more normal work 

following U.S. tariffs that were lifted earlier this year. 

     Canada's economic growth is expected to slow between July and 

September following a burst to 3.7% annualized expansion in the second 

quarter. Today's rebound in factory work is in line with market 

expectations the economy is resilient enough for the Bank of Canada to 

hold interest rates at its Oct. 30 meeting. 

     Sales rose in 11 of 21 manufacturing segments representing 63% of 

total production, Statistics Canada said. Another bright spot was a 6.1% 

gain in new factory orders in August. 

     The sales gain did little to tame swollen inventories. The ratio of 

inventories to sales slipped to 1.54 in August from July's 1.55 that was 

the highest level since 2009. 

     Over the last 12 months, sales have fallen 0.5% while inventories 

have climbed 6.2%. The buildup of stockpiles could be a signal that 

manufacturers are struggling to sell their goods. 

--MNI Ottawa Bureau +1-613-314-9647; greg.quinn@marketnews.com  

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