Canada's manufacturing sales disappointed in November as they were flat on the month, after rising 2.4 percent in October, below the 0.5 percent growth consensus estimate in an Econoday survey and Statistics Canada's 0.6 percent flash estimate. Sales were up 12.8 percent year-over-year, down from 16.2 percent.

Sales volumes edged up 0.1 percent on the month, with industrial prices down 0.4 percent.

The overall picture was mixed in November, with durable goods sales rising 1.8 percent, while non-durables contracted 1.7 percent.

Motor vehicles sales were up 12.7 percent, providing a significant boost to the headline index. Excluding autos and parts, sales would have been down 0.7 percent. A 2.7 percent gain in fabricated metals was also a positive contributor. On the non-durable side, declines of 4.4 percent in chemical product sales and 2.1 percent in petroleum and coal were key drivers behind the drop.

Leading indicators were not encouraging in November, with new orders down 0.3 percent and unfilled orders down 0.8 percent.

Inventories contracted 0.5 percent, leading the inventory-to-sales ratio down to 1.68 from 1.69.

Regionally, manufacturing sales rose in seven provinces, led by Ontario.

The unadjusted capacity utilization rate increased to 78.6 percent in November from 77.9 in October, led by durable goods industries. Over the month, auto production picked up in assembly plants in Canada, driving both sales and capacity utilization up in the sector.

Today's weaker-than-expected report drove Econoday Consensus Divergence Index down to 20, pointing to a minor outperformance of the economy.

Manufacturing sales are expected to rise 0.5 percent in November after jumping 2.8 percent in October, a month that ended a run of weak reports.

Manufacturing sales for twenty-one reporting industries are the Canadian dollar level of factory shipments for manufacturing durable and nondurable goods. Volume figures are also provided. The sales statistics form part of a wide monthly report that encompasses information on new orders, backlogs and inventories and is a key input into forecasts of monthly gross domestic product (GDP).

Manufacturer's shipments represent the monetary level of factory shipments for durable and nondurable goods and are a relevant indicator for an export-oriented economy. The data are used by analysts to evaluate the economic health of manufacturing industries. They are also used as inputs to GDP and needless to say, these data are used by the central bank in its decision-making process.

The monthly survey of manufacturing of which shipments is a part, provides a broad look at manufacturing activity levels. The level of activity in manufacturing can be affected by the level of interest rates which slows or stimulates the demand for goods and production. Shipments are an indication of how busy factories have been as manufacturers work to fill orders. The data not only provide insight to demand for items such as refrigerators and cars, but also business investment such as industrial machinery, electrical machinery and computers. Because a large proportion of shipments are headed south of the border to the U.S. and include a wide variety of durables, shipments are affected by U.S. economic activity as well as the exchange rate. Although the focus in this report is on shipments, it also contains information on inventories and new and unfilled orders.

Results from this survey are used by both the private and public sectors including finance departments of the federal and provincial governments, the Bank of Canada, Industry Canada, the System of National Accounts, the manufacturing community, consultants and research organizations in Canada, the United States and abroad.