* Sales rise 0.4 pct in Sept. on aerospace, primary metals
* Excluding aerospace, sales fell 0.7 pct
* Gains in eight of 21 industries
* Data confirms weak Q3 growth; outlook better for Q4
By Louise Egan
OTTAWA, Nov 15 Canadian manufacturing sales grew
0.4 percent in September from August due mainly to a sharp rise
in the volatile aerospace sector, but sales fell in the
heavyweight auto industry and in most other industries,
Statistics Canada said on Thursday.
The gain was above the 0.3 percent increase forecast. But
analysts said the details of the report were weaker and
confirmed slower economic growth in the third quarter.
"The slowing in activity is consistent with other indicators
that showed the economy geared down in the quarter," said Dawn
Desjardins, assistant chief economist at RBC Economics.
Sales rose in just eight of the 21 industries surveyed.
Excluding the aerospace product and parts industry,
manufacturing sales fell 0.7 percent.
In volume terms, overall sales were up 0.4 percent.
Statistics Canada sharply revised down its August factory
sales figure to a 0.9 percent gain from 1.5 percent previously.
Desjardins said, however, even the modest gain in
manufacturing, combined with expected similar increases in the
energy and farming sectors, should lift September gross domestic
product growth to 0.3 percent. The data will be released on Nov.
30, along with figures for third-quarter GDP.
"While this will not be enough to save the economy from
recording a weak reading in the third quarter of 2012 overall,
it will provide a solid handoff for the final quarter of the
year," she said in a note to clients.
The Bank of Canada, which has signaled it wants to raise
interest rates but not any time soon, projects third-quarter
growth of just 1.0 percent, annualized, down from 1.8 percent
and 1.9 percent in the previous two quarters.
The economy is likely to get a lift at year end and into
2013 from a rebound in U.S. manufacturing sector, a return to
full production in the energy sector and restocking of auto
inventories destroyed by Hurricane Sandy, said David Tulk, a
strategist at TD Securities.
However, that upbeat outlook is fraught with risk.
"The wider backdrop of subdued global demand, the persistent
strength in the currency and the uncertainty surrounding the
fiscal cliff in the US will limit the magnitude and durability
of the recovery heading into 2013," he said.
Production in the aerospace product and parts industry
surged 43 percent in September, the biggest jump since May.
Figures for this sector tend to have a disproportionate
influence on manufacturing data because of the size of the
orders and lengthy production period.
Strength in September also came from primary metals, where
sales rose 3.7 percent due in part to higher prices.
Auto sales, which have made a big comeback so far this year,
fell 3.6 percent in September. Motor vehicle sales were up 18.2
percent from a year earlier.
New orders for factory goods rose 2.2 percent while unfilled
orders slipped 0.3 percent.
Manufacturers continued to build inventories, which edged up
0.2 percent. The inventory-to-sales ratio was unchanged at 1.31