Canadian Manufacturing

June 15, 2009

Canada’s factory sector remains depressed.  Orders plunged 10.8% in April and were 31.7% below their July 2008 level.  Unfilled orders declined 5.5% in the latest month.  Factory sales edged 0.1% lower after dropping 3.1% in March and were 24.1% lower than last July.  The manufacturing sector’s implosion has been less intense since February, but the inventory-to-sales ratio of 1.58 in April remained much closer to January’s peak of 1.62 than to last July’s reading of 1.30.  In a separate release, Canadian new motor vehicle sales were flat in April and 18.6% lower than a year earlier on a seasonally unadjusted basis.  Canada remains in recession.  The appreciation of the Canadian dollar from 1.2504 per USD in late April to a high last week of 1.0942 is a fresh concern.  Today has been a day for correction in foreign exchange from a perceived U.S. dollar-oversold market.  The C-dollar has participated in this give-back of recent gains, but will the reversal last?  Probably only if the U.S. dollar advances in a general way.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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