REFILEUPDATE 2Canada Jan factory sales rebound on car sales
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OTTAWA, March 17 (Reuters) - A rebound in car sales lifted
Canadian manufacturers’ sales in January, but economists warned
that the sector remains under considerable stress as U.S.
demand for exports implodes.
Statistics Canada said on Monday that factory shipments
rose by 1.3 percent to C$49.3 billion ($49.8 billion) after
sliding 3.7 percent in December to a three-year low.
Analysts in a Reuters poll had expected a gain in January
factory sales of just 0.9 percent.
With the exception of December, though, factory sales were
still at their lowest since March 2005, as manufacturers
struggled to compete amid a strong Canadian dollar, higher
energy prices and the U.S. downturn.
“Following the less than stellar performance last year, we
expect the Canadian manufacturing sector to continue to
struggle in the face of these ominous headwinds,” Millan
Mulraine, economics strategist at TD Securities, said in a
note.
The data had little impact on the Canadian dollar %26lt;CAD=%26gt; as
markets digested the news of emergency moves by the U.S.
Federal Reserve on Sunday and the purchase of stricken Bear
Stearns (BSC.N: Quote, Profile, Research) by JPMorgan Chase %26amp; Co (JPM.N: Quote, Profile, Research).
Exports have been the softest spot in the Canadian economy,
contrasting with strong domestic spending to drag down
fourth-quarter economic growth to 0.8 percent on an annualized
basis from 3 percent in the previous quarter.
To shield the economy from the U.S. housing meltdown and
shaky credit markets, the Bank of Canada has cut its key
overnight rate by a full percentage point since December to 3.5
percent. More cuts are expected in April. Continued…
