Canada factories see biggest sales drop since 2009

Fri Feb 15, 2013 8:36am EST

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* Sales tumble 3.1 pct vs estimate of 0.8 pct decline

* Auto assembly plants decline 15.4 pct in month

* Factory sales in 2012 as a whole up 3.4 pct

OTTAWA, Feb 15 (Reuters) - Canadian manufacturing sales recorded the biggest decline in about 3-1/2 years in December due mainly to weaker auto production but also on lower sales across the majority of other industries, Statistics Canada said on Friday.

Factory sales tumbled 3.1 percent in the month compared with market forecasts for a 0.8 percent decline. The setback more than erased the 1.9 percent gain in November, revised from 1.7 percent previously.

Excluding the auto sector, sales fell 1.8 percent as 16 of 21 industries reported decreases, with the biggest downward pressure coming from chemicals, energy products and fabricated metals.

In volume terms, overall sales sank 3.8 percent.

Sales by motor vehicle assembly plants plummeted 15.4 in December. While that sector normally undergoes temporary plant shutdowns in the final month of the year, Statscan said the decline in December 2012 was greater than usually observed.

New orders for manufactured goods fell 4.4 percent in December while unfilled orders increased by 2.6 percent.

Inventories fell 1 percent and the inventory-to-sales ratio -- a measure of how many months it would take to exhaust stock -- rose to 1.34 from 1.32 in November.

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