Key industry and economic trends for october 2013


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  • Jul-September 2013 seen manufacturing sales for non-metal fabrication run at 29B
    Source: Stats Canada
  • Source: BMO
  • Ontario not taking enough advantage of the oil sands.
    Source: Conference board of Canada
  • Source: Baker Hughes
  • Source: CAPP
  • CAPP
  • Aug-Sep/13 were running $18B on average the highest level in 2013
    Manufacturing sales rose 0.6% to $49.9 billion in September, the fourth increase in five months. The gain in September was largely a result of higher sales in the motor vehicle assembly and food industries. Total sales in September were at their highest level since June 2012.
    Sales rose in 11 of 21 industries, representing about 55% of Canadian manufacturing.
    Both the durable and the non-durable goods industries posted 0.6% sales gains.
    Constant dollar sales increased 1.0% in September, indicating a rise in volumes.
    Source: Stats Canada
  • Source: Associated of equipment manufacturers
  • Source: Ward Automotive
    USA Production is schedule to hit 11M units the highest level since 2007.
    Canada production is schedule to hit 2.3M units, which is down from 2012. 2012 numbers reflected Talbotville Ford Plant, which has subsequently been closed
    Mexico Production is at 3M units the highest level. Since 2007 Mexico has seen its % of total automotive production go from 13.3% to 18.8. The USA has seen its production level dropped by 3.1% and Canada has seen its level dropped by 2.7%
    Labor Rates
  • Source: World Steel Association
  • Source: Source:
  • Source: Stats of Canada
  • Source: BMO
    Canada’s current account deficit narrowed to $15.5 bln in Q3 ($61.9 bln annualized), but the
    level was larger than expected after negative revisions to the prior quarter. The deficit for Q2
    now weighs in at $15.9 bln ($63.7 bln a.r.) versus the prior reading of $14.6 bln ($58.3 bln a.r.).
    So, at roughly 3.3% of GDP, the current account deficit is indeed indicative of an overvalued
    Canadian dollar as some others have pointed out this morning.
    The goods trade balance narrowed slightly in the quarter, to $2.2 bln, smaller than suggested
    by the monthly trade data and suggesting trade might have been somewhat less of a drag on
    growth—the full GDP report is out tomorrow. The non-merchandise deficit also narrowed
    slightly, including a lower services shortfall as the travel deficit has stabilized (narrowed
    slightly in Q3) amid a softer loonie and levelling off in cross-border trips.
    On the capital account side, foreign direct investment (FDI) inflows slipped for a second
    straight quarter to $10.4 bln, while FDI abroad rose to $20.7 bln after declines in the prior two
    quarters. Foreign portfolio inflows rebounded sharply to $16.5 bln after dropping over the past
    year, led by increases in both debt and equity investment. Canadian portfolio investment
    abroad picked up by a smaller amount, to $5.3 bln, leaving net portfolio inflows at the highest
    level in a year—but still well below the pace seen during the 2009-11 period
  • Source: Department of Transport - USA
  • Source: BMO and Bureau of Statistics for USA
  • Source: Stats Canada
  • Source: Stats Canada
  • Source: BMO
  • Source: BMO
    In contrast to the market-moving (and partly distorted) U.S. jobs data, Canada’s employment
    reading for October was as clean as whistle and will make no waves. Employment rose a
    respectable 13,200 in October, following the moderate 11,900 rise the prior month, with the
    jobs data finally returning to some semblance of order after the wild swings earlier this year.
    Details were mixed. Full-time jobs were solid at +16,000, and all of the gains were in the 25+
    age group. There were some mild blots on the report, however, as all of the net gains were in
    the public sector (private sector payrolls fell 22k), and the goods-producing sector saw broadbased
    declines. Still, the unemployment rate managed to hold steady after dipping to a 5-year
    low of 6.9% in September. The participation rate was unchanged at 66.4%.
    By sector: First the good news: There were big gains in hotels & restaurants (+30k), health
    care (+20k) and government (+19k). Now the bad news: most of the cyclical sectors declined,
    with retail & wholesale trade down 20k, followed by declines in construction (-9k) and the
    persistent and troubling weak spot of manufacturing (-6k and down a hefty 4.6% y/y). The
    biggest drag was in the rarely quoted “business, building and other support services”, which
    fell 32,600. Despite the split last month, the service sector has not been wildly stronger than the
    goods-producing sectors over the past year (+1.3% y/y versus +0.8% y/y).
    By region: The big story last month was a 34,100 pop in Quebec, which helped shave its
    jobless rate a tick to 7.5%. The flip side was a 14,700 drop in Ontario employment, which saw
    its jobless rate nudge up a tick to 7.4%. Otherwise, it was a 50-50 split, with half the provinces
    reporting small job declines last month. The most notable move in unemployment rates was a
    7 tick plunge in Saskatchewan, taking its rate to a national low of 3.6%, while Newfoundland
    & Labrador popped 6 ticks to regain the dubious title of highest rate in the nation at 11.0%.
    Bottom Line: Canadian employment was about as close to expectations as reasonably possible
    in October, rendering it a sideshow to the surprisingly solid U.S. payroll result.
  • Key industry and economic trends for october 2013

    1. 1. Key Industry and Economic Trends for October 2013 By: Paul Young, CGA Date: December 1, 2013
    2. 2. Canadian Manufacturing Sales
    3. 3. Commodity Prices
    4. 4. Oil Sands • • • • • CALGARY—The oil sands support more than 400,000 jobs in Canada and 1.5 percent of the country’s economy, but the sector is still falling short for domestic manufacturers, according to a report by the Conference Board of Canada. Every year, about $5 billion worth of goods come into the oil sands from overseas, and that number will burgeon to $140 billion over the next 20 years, said Michael Burt, director of industrial trends with the Conference Board, who presented the report at the National Supply Chain Forum in Calgary earlier this week. “It’s primarily manufactured goods that we’re importing. Things like heating and ventilation equipment that’s produced locally and could be sourced from companies here in Canada,” Burt said. Steel products are coming in from offshore, along with transportation equipment, electronics and other field components. “It’s true that the vehicles used in the oil sands are sometimes site specific or product specific and we may not make the parts right now in Ontario to supply those vehicles, but how easy would it be to retool to adapt our production processes?”
    5. 5. Oil Rigs
    6. 6. Natural Gas
    7. 7. Natural Gas
    8. 8. Canadian Manufacturing Sales
    9. 9. Agriculture Equipment
    10. 10. Automotive Production
    11. 11. Steel Production
    12. 12. Machine Tools Sales
    13. 13. Canada Exports and Imports
    14. 14. Canada Current Account Balance
    15. 15. Class 8 Truck Sales
    16. 16. Freight Index
    17. 17. Housing Starts
    18. 18. Canada Retail Sales
    19. 19. Canada Retail Sales
    20. 20. US Retail Sales
    21. 21. Unemployment - Canada