RTTNews - Canadian manufacturing sales plunged far more than expected in May, with plant shutdowns in the motor vehicle industry and volatility in the aerospace industry contributing to the decline.

Manufacturing sales fell 6.0% to $38.4 billion in May, the lowest level since November 1998, according to data released Wednesday morning by Statistics Canada. Economists forecast a drop of 0.8%.

Manufacturing sales had leveled off between February and April, after falling by 18.7% between October 2008 and January 2009.

Constant dollar manufacturing sales fell 5.8% in May, indicating that lower volumes rather than price changes were behind the decrease in sales.

Sales in 17 of 21 manufacturing industries decreased in May, accounting for about three-quarters of total sales.

The transportation equipment industry led the declines, falling 25.7% compared with April. Excluding the transportation equipment industry, total Canadian manufacturing sales decreased 2.1%.

Motor vehicle manufacturing sales dropped 25.4% on the back of several plant shutdowns. Motor vehicle parts manufacturing fell 22.2%, reflecting a decrease in demand from vehicle assembly plants.

Production in the aerospace industry decreased by $781 million, reversing a similar sized increase in April. The aerospace products and parts industry has been extremely volatile over the past several months.

Primary metal manufacturers reported a 9.0% decrease in sales for May, a reflection of plant shutdowns, lower prices and weak market demand.

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