Canadian manufacturing and wholesale sales both fell in November on weakness in the auto sector, Statistics Canada said in a pair of reports Thursday.
The agency said total manufacturing sales fell 1.2% to $70.8 billion in November, while wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, fell 1.8% in November to $84.4 billion.
Alexandra Brown, North America economist at Capital Economics, called it grim news for the fourth quarter.
“While the decline in manufacturing sales in November was broadly as expected, the surprise slump in wholesale sales suggests that GDP growth was quite a bit weaker than expected last quarter,” Brown wrote in a report.
In an early estimate for November real gross domestic product released last month, Statistics Canada suggested GDP grew by 0.1% for the month.
Brown suggested that the weak wholesale sales figures could mean the GDP figure might fall short of that estimate and raises the risk that it was instead unchanged for November.
“That would be a concerning result following the 0.3% fall in October and would put the economy on track for negative growth last quarter,” Brown said.
The drop in manufacturing sales came as sales of motor vehicles fell 15.9%, while the motor vehicle parts group dropped 6.3%. The machinery subsector lost 3.2%.
The declines were partially offset by a 6.8% increase in sales of petroleum and coal products, helped by both higher prices and volumes.
In real terms, manufacturing sales fell 2.3% in November.
In a separate report, Statistics Canada said wholesale sales of motor vehicles and motor vehicle parts and accessories fell 11.5% in November to $12.9 billion, the lowest level since October 2022.
Sales in both the motor vehicle group fell 14.6%, while the used motor vehicle parts and accessories group dropped 26.9%. The new motor vehicle parts and accessories industry group rose 2.1%.
In volume terms, wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, fell 2.3% in November.
The pair of economic reports comes ahead of the Bank of Canada’s interest rate decision and monetary policy report on Jan. 28. The central bank is widely expected by economists to keep its policy interest rate on hold at 2.25%.