Canada’s manufacturing sales fell by 1.0% in the latest report, a significant decline from the previous increase of 2.5%. This represents a 3.5 percentage point drop, highlighting a reversal in manufacturing activity.
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The actual decline of 1.0% was better than the analyst estimate of a 1.5% decrease, which may provide some relief to the market. However, the downturn in manufacturing sales is likely to weigh on industrial and manufacturing stocks, as it suggests weakening demand. The market impact could be short-term, driven by sentiment, but persistent weakness may influence longer-term policy expectations.