MNI DATA REACT:Canada Factory Sales Record -29%, Forecast -20%

By Greg Quinn

     OTTAWA (MNI) - Canadian factory sales fell a record 29% in April as

Covid-19 shut auto assembly lines and other facilities, with Statistics Canada

signaling production will rise in May as restrictions eased.

     The decline to CAD36.4 billion exceeded the MNI economist median for a 20%

retreat. April was the first full month of shutdowns following restrictions that

took hold in the last two weeks of March, when sales fell 10%. Sales fell in all

21 categories, led by drops of 98% for automobiles and 46% for petroleum and

coal.

     The inventory-to-sales ratio jumped to 2.41 from 1.74, the largest increase

since December 2008. New orders fell 31% to CAD35.1 billion. 

     "During the second week of May, many manufacturers resumed production after

full or partial shutdowns in April," Statistics Canada's report said. The easing

of health restrictions "is expected to bolster sales compared with April."

     Economists see GDP falling at a 40% annualized pace in the second quarter

before rebounding at a similar pace in the third quarter, with total output

needing much longer to recover.

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

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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