Canada’s factory sales drop 1.7% on latest petroleum plunge

Canadian factory sales fell the most in five months in January as falling prices for refined oil curbed receipts.

Sales dropped 1.7 per cent to $51.4-billion, Statistics Canada said Tuesday in Ottawa. Economists forecast a 1.2-per-cent decline, according to the median of a Bloomberg survey with 18 responses.

Petroleum and coal product sales dropped 11.9 per cent to $4.94-billion, the biggest one-month decline since 2008, as prices fell 11.4 per cent. Sales in the category have declined 35 per cent in the past seven months, and fallen to the lowest since May, 2009.

Sales of machinery recorded an 8.9-per-cent decline in January, with Statistics Canada citing the beginning of a new production cycle for the drop. Despite the decline, machinery sales recorded their highest January reading since the series began in 1992, according to the statistics agency.

Transportation equipment sales rose 3.2 per cent in January, led by a 21.7-per-cent jump in aerospace. Shipments of motor vehicles were down 2 per cent.

Sales fell in 14 of 21 categories tracked by Statistics Canada, accounting for just below 50 per cent of shipments.

A weaker currency boosted the Canadian dollar value of new and unfilled orders, and inventories. New factory orders rose 12.1 per cent during the month, while unfilled orders were up 7.2 per cent.

Inventories increased 2.2 per cent, with the ratio of factory stockpiles to sales rising to 1.39 from 1.34 in December.

Excluding price changes, a better indicator of the industry's contribution to economic growth, factory sales fell 1 per cent.

From a year earlier, manufacturing sales rose by 2.9 per cent.