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By David Ljunggren
OTTAWA Dec 15 Canadian manufacturing sales
unexpectedly fell by 0.8 percent in October from September on
widespread weakness, indicating fourth-quarter growth could be
sluggish, Statistics Canada data showed on Thursday.
Analysts polled by Reuters had expected sales to increase by
0.4 percent from September. The decline was the biggest since
the 0.9 percent retreat in March 2016.
Canada's economy grew by 3.5 percent on an annualized basis
in the third quarter after shrinking in the second quarter
following a major wildfire in oil-producing Alberta. Economists
expect fourth-quarter growth to be more modest.
"Today's data are a clear negative for the October GDP
outlook, supporting our view for a meaningful slowdown in
fourth-quarter growth from the third quarter's firm pace," said
Nick Exarhos of CIBC Economics.
The Bank of Canada, which last year cut interest rates twice
to help counter the shock caused by low oil prices, pointed to a
"significant" amount of slack in the Canadian economy as it held
rates steady last week.
Governor Stephen Poloz is scheduled to hold a news
conference at 11:15 a.m. (1615 GMT) on Thursday to discuss the
bank's latest financial system review.
In October, the central bank cut its forecast for annualized
fourth-quarter growth to 1.5 percent from 2.8 percent.
"This should help remind markets of the challenging outlook
for the Canadian economy," said TD Securities strategist Robert
Both in a note to clients.
Sales fell in 15 of the 21 industries, representing 61
percent of the manufacturing sector. The volume of goods sold,
a measure which strips out the effect of price changes and is
closely watched by economists, plunged by 1.7 percent.
Primary metal sales sank by 2.4 percent while petroleum and
coal products posted a 1.7 decline on lower volumes of product
(Reporting by David Ljunggren; Editing by Meredith Mazzilli)