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Auto slump hits Canada factory sales in March
OTTAWA (Reuters) - The ailing U.S. economy and an ongoing slump in the auto industry caused an unexpectedly sharp 1.6 percent drop in Canadian manufacturing sales in March after two months of gains, Statistics Canada said on Thursday.
The weakness in March was spread across 18 of 21 industries and in constant dollars sales fell 3 percent.
Analysts surveyed by Reuters had forecast, on average, a 0.2 percent rise in manufacturing sales in the month. Statscan revised the February sales gain to 1.3 percent from 1.6 percent. First quarter factory sales were down 5.5 percent from the same period in 2007.
Canadian auto manufacturers -- the hardest hit by the weakening U.S. economy -- were further hampered by labor disputes in U.S. factories that supply car parts, Statscan said. U.S. consumers' shrinking appetite for new cars and rising energy prices also curbed activity in the sector where another plant closure was announced this week by GM Canada .
Sales outside the auto sector slid 1 percent largely due to declines in shipments of chemicals and computer and electronic equipment.
Despite the slower sales, new orders grew 2.9 percent and unfilled orders jumped 3.7 percent but excluding aerospace contracts, those actually fell 2.2 percent and 0.2 percent, respectively. Inventories edged up 0.2 percent and the inventory-to-sales ratio climbed to 1.34 from 1.31.
(Reporting by Louise Egan; editing by Renato Andrade)
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