MNI DATA PREVIEW: Canada Factory Sales May Post 5th Fall in 6M

--Railway Strike Curbed Shipments Following UAW Strike

By Anahita Alinejad

     OTTAWA (MNI) - Canada will likely report the fifth decline in factory sales

in six months for November, with shipments disrupted again by labor strikes.

     Sales declined 0.4% according to the MNI economist median, following a 0.7%

October decline. While the previous report showed disruptions from a UAW strike

that hit auto production, November is hurt by a CN railway worker strike. 

     The declines could again pull down GDP on the month and take fourth-quarter

growth further away from the BOC's estimate to below a 1% annualized pace. The

report comes a day before the central bank is expected to leave its benchmark

rate at 1.75% and affirm a neutral stance, though some investors see a rate cut

coming in the next few months as weak growth lingers.

     Slow sales growth has helped boost the factory inventory-to-sales ratio to

1.54 in October, close to the highest record since 2009. 

     Manufacturing is among industries most exposed to trade fights that have

cut global growth estimates and led companies to break up their supply chains. 

     Auto production may see a partial rebound in November after the UAW strike,

economists say. That and the end of the rail strike in November are signs that

factory sales will pick up again in future reports. 

     Still, few experts see manufacturing as strong enough to lead growth this

year, especially since while GM workers ended their strike, the company closed a

factory in Ontario late last year.

--MNI Ottawa Bureau; +1 613 981-1671; email: anahita.alinejad.ext@marketnews.com

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