17 February 2009

U.S. crisis batters Canadian manufacturing

The following is excerpted from the 17 February 2009 edition of “globeandmail.com”.

The economic pounding hit coast-to-coast in December, and will likely get worse.

The value of Canadian manufacturing sales … plunged 8 per cent in December from November, Statistics Canada reported Monday.

Half of the problem was falling prices for key exports such as petroleum and forest products. The other half of the decline is more worrisome: weak demand for Canadian goods. The volume of products sold, such as auto parts, fell severely….

December saw the fifth consecutive month-to-month decline in manufacturing sales – the trend started in August – and the pace is accelerating. The 8-per-cent fall in December followed a 6.2-per-cent slide in November. Finance Minister Jim Flaherty does not expect things to get better any time soon. He told a meeting of Group of Seven finance ministers in Rome on the weekend that he expects “numbers of all kinds to continue getting worse month after month this year.”

While it is not yet official, the Canadian economy likely entered a recession in the final three months of last year, based on Monday's manufacturing-sales numbers and last week's Statistics Canada report that the country had posted its first trade deficit in more than three decades. Collapsing exports to the United States and a general stagnation in global trade were the cause.

No region in Canada is insulated from weakening demand caused by the year-old U.S. recession….