Canadian manufacturing data for July
- Prior was -1.2% (revised to -1.4%)
- Sales down in all 11 industries
- Inventories +0.3% vs -1.3% prior
- Unfilled orders -1.4%
- Capacity utilization 77.3% vs 81.3% prior
The decline in July was mainly due to lower sales in the primary metal (-7.3%) and motor vehicle industries (-4.7%). Maintenance shutdowns were the story in both industries as steel production and autos both had extended maintenance projects. I wouldn't read too much into this but it will be a drag on Q3 GDP.
In the bigger picture, inventories have consistently risen over the past two years and sales haven't been there to match. This is the inventory-to-sales ratio:
USD/CAD has ticked higher to 1.3272 on this and it's testing yesterday's high. From here, expect oil prices to dominate.
