OTTAWA (CP) — A slide in the automotive industry helped push manufacturing sales down 1.7 per cent to $51.2 billion in August, erasing the 1.3 per cent gain recorded in July, Statistics Canada reported Tuesday.
The agency said the economic slowdown in the United States — the market for 85 per cent of Canadian autos and parts — was to blame for the poor performance in the motor vehicle industry.
The industry, in turn, pulled down Canadian manufacturing sales overall.
The transportation equipment sector as a whole was down 9.7 per cent in August, erasing most of the 10.8 per cent gain reported a month earlier.
Excluding motor vehicle and parts, manufacturers' sales increased 0.2 per cent in August, the eighth increase in the past 12 months.
Ontario reported the sharpest percentage decrease in provincial manufacturing sales, dropping 4.6 per cent or $1.2 billion. Saskatchewan had a strong month of sales, surging ahead 15.4 per cent compared with July.
On an industry-by-industry basis, sales fell in 11 of 21 manufacturing industries, representing about 56 per cent of total sales.
Sales of durable goods dropped 2.8 per cent, the fourth decrease in the last five months. Non-durable goods were off 0.4 per cent.
New orders dropped five per cent in August after a strong July.
There were some bright spots, though. The aerospace industry reported that production increased 3.8 per cent in August, recovering some of the 13.4 per cent drop in July.
A two-month strike at a major Quebec primary metals plant ended at the end of July and industry sales increased 3.5 per cent in August to $4.6 billion, despite a 5.2 per cent drop in prices.
For the first time in a year, manufacturers' backlog of orders edged down 0.1 per cent to $54.9 billion, although unfilled orders remained a third higher than in August 2006.
Unfilled orders may be considered an indicator of future sales, assuming orders are not cancelled.
Manufacturers' inventories edged down 0.2 per cent to $66.7 billion in August. Inventories have remained flat over the last five months after decreasing slightly at the end of 2006 and the first few months of 2007.