Manufacturing sales in Alberta edged down 3.2 per cent in September to $6.1 billion, according to data released Tuesday by Statistics Canada.
“Sales were down in 14 of 21 industries, led by petroleum and coal products (-9.5 per cent). Shutdowns at major refineries contributed to the decline,” said the federal agency.
On a year-over-year basis, sales decreased by 10.1 per cent.
Across Canada, manufacturing sales fell by 0.2 per cent in September to $57.4 billion, following a 0.8 per cent increase in August.
“Sales were down in 10 of 21 industries, representing 62.2 per cent of the Canadian manufacturing sector. Sales in the petroleum and coal product and the motor vehicle parts industries accounted for the majority of the decrease in September. However, these decreases were largely offset by increases in the machinery and motor vehicle industries,” said StatsCan.
“Sales in the petroleum and coal product industry were down for the fourth straight month, falling 1.9 per cent to $5.9 billion in September. This decrease reflected lower sales volumes, as prices for the industry rose 0.3 per cent according to the Industrial Product Price Index. Partial shutdowns at a number of Canadian refineries for maintenance work during the month were a major contributor to the decline in volumes sold (-2.4 per cent).”
On an annual basis, sales in Canada were down 1.2 per cent.
Omar Abdelrahman, economist with TD Economics, said September’s manufacturing sales report was disappointing, and leaves the third quarter manufacturing volumes down one per cent.
“While some of the volumes decline can be attributed to transitory factors (refinery maintenance and the UAW strike), weakness was broad-based across industries and provinces. The still-elevated inventory to shipments ratio and soft forward-looking indicators suggest that further weakness may still be in the pipeline,” he said in a commentary note.
“All told, today’s data leaves our third quarter GDP tracking closer to the one per cent mark, slightly below the Bank of Canada’s 1.3 per cent.”
Nathan Janzen, Senior Economist with RBC Economics, said the go-forward outlook for Canadian manufacturing still hinges significantly on whether US-China trade negotiations continue to make progress.
“The tone of negotiations has improved with a ‘phase 1’ agreement to at least prevent further tariff hikes looking more likely,” he wrote in a commentary.
“Anything that eases headwinds for U.S. manufacturers also eases headwinds for their cross-border production chains, including in Canada. But it is also worth remembering that not all Canadian growth challenges are coming from abroad. An easing in trade headwinds would lower the risk of a more severe downside scenario, but would arguably do nothing to ease labour shortages, for example, that businesses have continued to report as a larger impediment to growth than external demand concerns.”
Mario Toneguzzi is a business reporter in Calgary.
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