Manufacturing sector extends slump

Canadian manufacturing sales continued a streak of declines that dates back to August 2008 as they fell by 5.4 per cent in January.

The drop left sales by the country's manufacturers near 10-year lows.

Manufacturing sales continue a sharp descent.

Statistics Canada said Tuesday that motor vehicle and motor vehicle parts industries, particularly in Ontario, reported record decreases in January.

The auto sector has been battered by falling sales as consumers in Canada and the United States cut their spending on big-ticket items in the current recession. Weak automotives sales have led to auto plant closures and slower production.

Excluding motor vehicles and parts and accessories, manufacturing sales decreased a more moderate 1.2 per cent from December.

The declines were spread across much of Canada's manufacturing sector, with sales in 14 of 21 manufacturing industries down in January, accounting for about three-fifths of total sales.

Ontario, which is heavily dependent on the auto sector, reported the largest decrease by province, with sales down by 11.3 per cent.

Productivity down

Separately, Statistics Canada also reported that Canada's labour productivity fell by 0.5 per cent in the fourth quarter of 2008, extending a period of weakness dating back to the second quarter of 2007.

Over the last three months of 2008, the country's productivity declined as output dropped more rapidly than hours worked.

Canadian real gross domestic product dropped by 1.3 per cent in the fourth quarter, on weak domestic demand and the continuing slump in exports. The number of hours worked fell 0.8 per cent.