Softer Canadian Production and Lower US Inflation on Tap Next Week - Action Forex
The advance estimate from Statistics Canada was that September Canadian manufacturing sales edged down 0.1% from August, despite another monthly surge in petroleum and coal prices. Manufacturing prices were up ~1% in September on a seasonally adjusted basis by our count, implying the volume of sales (excluding price impacts) declined even more after already contracting 0.7% in August. Indeed, economic growth in Canada is starting to look substantially softer. Consumer related sectors have weakened significantly – retail sales are tracking below Q2 levels to-date in Q3 and hospitality services (like restaurants and hotels) have flatlined. But cooling demand globally is also filtering down supply chains and slowing manufacturing output with the broader economy on track for another small quarterly decline in Q3.
The advance estimate from Statistics Canada was that September Canadian manufacturing sales edged down 0.1% from August, despite another monthly surge in petroleum and coal prices. Manufacturing prices were up ~1% in September on a seasonally adjusted basis by our count, implying the volume of sales (excluding price impacts) declined even more after already contracting 0.7% in August. Indeed, economic growth in Canada is starting to look substantially softer. Consumer related sectors have weakened significantly – retail sales are tracking below Q2 levels to-date in Q3 and hospitality services (like restaurants and hotels) have flatlined. But cooling demand globally is also filtering down supply chains and slowing manufacturing output with the broader economy on track for another small quarterly decline in Q3.
