UPDATE 2Canada Dec factory sales tumble autos sag
(Adds analysts, market reaction, detail)
By Louise Egan
OTTAWA, Feb 15 (Reuters) - Canadian factory shipments of
vehicles plunged in December to their lowest level in over a
decade, pushing overall manufacturing sales down by more than
expected and painting a gloomy outlook for growth.
Manufacturing sales tumbled 3.4 percent in December, a sign
the U.S. economic slowdown is biting hard and cementing
expectations the Bank of Canada will cut interest rates by 50
basis points in March.
It was the biggest drop since August 2003 and off from a
gain of 1 percent in November.
But excluding the auto sector, factory sales slipped by a
more modest 0.8 percent. In volume terms, total sales fell 5.8
percent.
The market consensus was for a mere 0.1 percent dip in
factory sales in December.
“We now think that there is a substantial risk that
December GDP growth will come in at below zero,” said Millan
Mulraine, economics strategist at TD Securities.
“The impact of the Canadian dollar and the U.S. slowdown
(evident in this unfavorable report), plus yesterday’s trade
numbers strengthens our case for a 50 basis points cut by the
Bank of Canada next month,” he said in an Email commentary. Continued…
