According to National Bank of Canada analyst Kyle Dahms, point out that Shipments set to decline in the fourth quarter and that real inventory-to-shipments ratio reached the highest since the 2008/09 recession.
Key Quotes:
“Canadian manufacturing shipments came in below expectations in November as sales fell for the first time in three months in the petroleum and coal products segment. Lower production due to maintenance and other work at refineries, combined with lower prices for these products, led to the largest one month decline in over 3 years.”
“At the national level, total shipments in November decreased in real terms, while inventory volumes were flat. This should lead to a negative contribution to GDP in November.”
“Assuming no change in December, Q4 may break the longest streak of uninterrupted quarterly growth since data collection began in 2002. Still, rising inventories should help offset the impact on GDP.
“Looking further ahead, the situation in the manufacturing sector isn’t much brighter. The inventories to sales ratio is at its highest level since the recession, hardly a precursor for a pick-up in production.”
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