Skip to main content

Canadian manufacturing in the dumps

Well it was to be expected; with our southern neighbor having a difficult time in the sales department (although consumption was up in October, removing gas and cars from the equation shows sales growth of 0.2% as anemic).  StatsCan just released the September manufacturing data, and sales are off 0.6% for the month, in constant dollars sales are off by 1.4% -- manufacturing sales are still up 11% from the March 2009 low, but as the chart shows Canada’s manufacturing sector is having a hard time.



Of course a month doesn’t a trend make, especially since the bulk of the shortfall (7%) came from Aerospace (a particularly volatile sector), but the automobile sector was also off by 10% -- which considering consumption figures in America were largely the result of demand for new vehicles – should we read something here with regards to U.S. consumption for the rest of 2010?  Unsurprisingly, the material and energy segments are both up, but then they have less scope for dramatic rebound (oil and gas flows are predictable and steady).

With motor vehicles and aerospace being the biggest losers it follows that Quebec (-2.3%) and Ontario (-1.6%) suffered the brunt of the decline, while the energy rich western province are up slightly.

Overall, this confirms that the BoC was right to stop raising interest rates.  Canada’s economy is slowing dramatically, the 2010 GDP forecast that were around 3.6% in January have been revised four times since, and the BoC’s 3% GDP growth for the whole year now appears to be wildly optimistic, a figure of 2.6% seems more probable, Vs. 3.1% for the U.S.

On the bright side inventory continue to fall (again StatsCan numbers) as to inventory to sales, but and this is more problematic “unfilled orders” declined.  So we know that Canadian companies are very good at controlling inventory levels, but it may be due to a realization that order backlogs are not where they should be.








Popular posts from this blog

what people get wrong about tariffs

 The issue is simple. What percentage of the economy is dependent on tariff goods? The truth, is that the US economy is far more closed than people understand. People genuinely believe that all manufacturing has ceased to exist in the United States all given to China on the altar of woke policy the truth can be further from That statement. Only about 15% of US GDP is related to foreign trade. Of that amount, slightly more than half is from Canada in Mexico. And half of that is energy. What that means, is that about 7% of US GDP is tariff dependent. The proof in the pudding, is how little money tariff generates. People think that 30 or 50 billion is a lot it’s not in an economy that has $3 trillion. The impact on the US economy will be less visible but not absent. Inflation hasn’t occurred yet first because tests have hardly started to bite, but more importantly it’s such a small percent of the economy. Now certain things are critical. The rare earth metals from China were critical....
Post a Comment
Read more

The end of Tesla?

 it takes a special kind of idiot, to think that he can antagonize his entire customer base, and think that it will not impact his business. When Elon Musk went to work for Donald Trump, and created the doge department, he antagonized every liberal, and these people represent 90% of his client base.That’s not a brilliant move. Now Elon Musk is worth hundreds of billions of dollar, so he shouldn’t care a great deal, however, he needs to care because of several other issues. The cyber truck has been a disaster, most have had to be recalled because of defective glue, it’s not a truck, it’s not a car, it’s noisy, relatively uncomfortable, but great as a development platform. What Tesla has learned in making car manufacturing more seamless is truly amazing. The problem was that Elon Musk was so pissed with the Democrats, and with Joe Biden, in particular because of some slight, which were just plain stupid too. By the way, that he decided to support with hundreds of millions of dollar, ...
Post a Comment
Read more

Demographics

 I am preparing a kind of family tree for our children so that they know where they came from.  In my family I am the only survivor, although my brother and sister died recently they were both in their seventies (a story I told already).    It was a fun process, but it provided more than that.  First, I married relatively young I was 26 when I married and nearly 30 when our first child was born.   I was looking at my ancestors.  On my mother's side, she had 6 siblings, Four died before the age of 30, two in war, and two from illnesses.  Only she and a single sister survived.   The two boys had a child each but they died in WWII, and the other sister died as an infant.   what is interesting is that every one of my mother's siblings had children in their early 20s.   I know that my mom was hardly 20 when my brother was born.    What is remarkable is that among our friends, we are the only ones to have fou...
Post a Comment
Read more