Canadian manufacturing shipment and order data for July shows economic weakness even ahead of the attack on the World Trade Center.

“While today’s data are somewhat better than expected, the overall tone remains downbeat. The recent border snarls and production delays, as well as the expected pullback in consumer spending on big-ticket items, will compound the factory slowdown,” says BMO Nesbitt Burns.

Manufacturing shipments slipped 0.2% in July, notes BMO. June’s numbers were revised down to a 2.8% drop, down from a 1.9% slide. “Some of the latest drop reflects lower prices for refined petroleum products, although 13 of the 21 industries reported declines. Shipments of computers and electronic products rose 4.8%, but are still down 16.8% from year-ago levels so far in 2001.”

Orders were better than expected in July, rising 1.7%. Inventories edged down just 0.1%.

“While not quite as weak as the U.S. picture, Canadian manufacturing continues to soften and is bound to print some very ugly numbers in the months ahead,” concludes BMO.