Release Explanation: Measures the total value of sales at the manufacturing level. A rising trend has a positive effect on the nation's currency because increased sales at the wholesale level are a good indication that there is high consumer demand at the retail level.
Trade Desk Thoughts: Sales at Canadian manufacturers declined 6.4% to $48.4 billion current dollars in November, Statistics Canada said today. It was the fourth straight monthly decline and the lowest level of sales on a monthly basis since December 2004. In real terms, sales fell to their lowest level in nearly 10 years which means about half the current dollar decline is due to lower prices. Declines were led by oil (-18.5%) and metals (-6.0%). At the industry level, sales in 12 of 21 manufacturing industries decreased in November, accounting for over four-fifths of total sales.
November sales were down in the five largest industries, led by a 20.6% drop by petroleum and coal product manufacturers. Petroleum and coal product sales have fallen for five consecutive months. Sales have decreased by almost $3 billion compared with the peak of $8.2 billion reached in June 2008. Falling prices were the most significant factor in explaining the lower value of sales in November.
Primary metal manufacturers also reported significantly lower sales, down 17.4% to $4.1 billion, as both falling prices and deteriorating global demand negatively influenced the value of sales. It was the lowest level of sales since March 2006. Sales in the transportation equipment industry decreased 3.9%. Aerospace products and parts production pulled back 22.5% after a 27.2% gain in October, the first production decrease in the aerospace industry since August. Chemical product manufacturers posted an 8.7% drop in sales.
Forex Technical Reaction: Crude futures were recently trading 50 cents lower on the day and the cad was hitting its highest price since the week of Dec. 07 of last year.