The headlines from the third monthly increase in Canadian manufacturing sales are masking weakness in forward-looking indicators, says CME chief economist. PHOTO courtesy LincolnElectric
Canadian manufacturing sales rose 0.4% to $72.8 billion in September, marking the third consecutive monthly increase in current dollar sales.
However, Alan Arcand, chief economist Canadian Manufacturers & Exporters (CME), says the underlying details of recent manufacturing sales reports have been less impressive than the headline figures.
“Indeed, the three consecutive monthly sales gains have been entirely driven by higher prices, as volumes were down 0.4% over this period,” Arcand says. “Unfortunately, the near-term outlook for the manufacturing sector remains cloudy, as a slowing global economy and high interest rates weigh on demand for manufactured goods.”
Arcand adds that forward-looking indicators are discouraging. The total value of Canadian manufacturing unfilled orders fell 1.2% to $101.9 billion in September, primarily due to lower unfilled orders of aerospace products and parts. At the same time, new orders decreased 1.7% to $71.6 billion in September, down for the second time in three months.