Canada: Factory output softened in Q3 – NFB
|In August, Manufacturing Shipments in Canada rebounded after two negative months, rising 0.8%. Jocelyn Paquet, analyst at the National Bank of Canada, explains the rebound won’t be enough to salvage a poor third quarter for factories.
Key Quotes:
“Manufacturing sales rebounded in August following two lackluster prints in June (-1.5%) and July (-1.3%). The transportation category was the main contributor to the improvement as both the motor vehicles (+2.6%) and aerospace (+3.9%) segments saw healthy increases in shipments.”
“Looking at the data in volume terms, both shipments (+0.6%) and inventories (+0.4%) posted decent gains. Although this should translate into a positive contribution to growth in August from the manufacturing sector, it won’t be enough to salvage what looks like a poor third quarter for Canadian factories.”
“With just one month of data still to come – and September is unlikely to be great due to ripple effects of the GM strike South of the border -, real manufacturing shipments are tracking a 3.3% annualized decline in Q3. While an inventory buildup (+4.0%) in the quarter may provide some offset, ever-expanding stocks could eventually hinder production. Recall that the real inventory-to-shipments ratio now stands at a cyclical high, hardly the harbinger of a ramp up in output.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.