OTTAWA – Manufacturing sales fell more than expected in October, raising concerns about the pace of economic growth in the final three months of the year.
Statistics Canada said Monday that manufacturing sales fell 1.1 per cent from September to $50.4 billion, the third consecutive monthly decrease.
Economists had expected a drop of 0.5 per cent, according to Thomson Reuters.
“When compared with the third quarter’s strong performance, October’s data suggests that more modest sales activity is likely for the final quarter of 2015,” TD Bank economist Brian DePratto said.
“This translates into a much slower pace of expansion to close out the year.”
Statistics Canada reported earlier this month that the economy grew at an annualized rate of 2.3 per cent in the third quarter after contracting in the first two quarters of the year.
The Bank of Canada has forecast growth in the fourth quarter to slow to an annual pace of 1.5 per cent.
In constant dollar terms, manufacturing sales in October were down 1.0 per cent from the previous month.
The drop was due to lower sales of petroleum and coal products, aerospace products and parts, and machinery.
Sales were down 5.7 per cent to $4.5 billion in the petroleum and coal product industry, due in part to maintenance work at some refineries that began in September.
The aerospace product and parts industry fell 10.3 per cent to $1.6 billion, while machinery sales fell 4.6 per cent in October to $2.8 billion.
Royal Bank senior economist Nathan Janzen noted that even excluding the volatile aerospace and petroleum and coal groups, sales still inched down 0.2 per cent on top of a 0.9 per cent September decline.
“The third consecutive drop in the volume of manufacturing sales in October left the measure well below both its year-ago level and its third-quarter average and marks a disappointing start to the fourth quarter,” Janzen said.
Sales fell in five provinces in October as New Brunswick posted the largest drop in dollar terms.
New Brunswick saw sales fall 23.9 per cent to $1.1 billion in October, while Quebec declined 2.1 per cent to $11.8 billion. Alberta manufacturing sales dropped 1.9 per cent to $5.5 billion.
Sales rose 0.6 per cent in Ontario to $24.4 billion, helped by the motor vehicle assembly industry.
Inventories rose 0.5 per cent to $73.5 billion in October, while unfilled orders fell 1.3 per cent to $94.1 billion.