Honda's Alliston, Ont., engine plantDeborah Baic/The Globe and Mail
Canadian manufacturing sales unexpectedly slid 0.9 per cent in July, according to Statistics Canada data on Wednesday, reflecting weak U.S. demand for export goods like cars and paper products.
Markets had expected a 0.2 per cent gain in factory sales in the month, according to the median forecast in a Reuters poll. Statscan revised its estimate of June sales to a 0.1 per cent decline from a gain of 0.1 per cent initially.
The biggest declines in July were in vehicle manufacturing, paper products - two sectors that rely heavily on the U.S. market - and furniture and related products.
Furniture factories were hardest hit in the provinces of Ontario and British Columbia where the new harmonized sales tax was introduced in July.
New orders tumbled 3.9 per cent in July, largely due to weakness in the auto industry, while unfilled orders also fell 1.1 per cent.
Inventories grew 0.3 per cent and the inventory-to-sales ratio - the number of months it would take to exhaust stock at the current sales pace - rose for the second straight month to 1.33 from 1.32 in June.