Manufacturing is a broad sector of the economy that includes everything from gasoline and French fries to pharmaceuticals and auto parts.

Despite the range of activities, the overall direction of the sector’s sales provides one way to assess the overall health of the economy.

Unfortunately, the direction in Canada at the moment is down.

August marked the 11th month in a row that the value* of manufacturing sales pulled back on a year-over-year (y/y) basis. Sales were down by 4.4% compared to August 2023.

Taking out the effect of price change, the estimated y/y volume of shipments was down by 5.1% for the 6th decline in a row.

There are a lot of moving parts behind this trend, but it highlights, and is evidence of, the tepid growth trajectory of the Canadian economy. Accounting for population increase, Canada’s GDP growth has not only been tepid but negative.

With the Bank of Canada pondering the size and timing of cuts to its trendsetting policy interest rate (its next announcement comes on Wednesday), the downward trend in manufacturing sales can be added to a rising unemployment rate and slowing consumer spending as reasons for taking rates lower and at a faster pace.

Our expectation is for a 50 basis-point cut on Wednesday, taking the policy rate from 4.25% to 3.75%. We also think more cuts will follow until the rate settles in around 2.75% by next summer.

We will find out more in a couple of days and report on what we learn in Wednesday’s edition of The Twenty-Four.

*All data in today’s Twenty-Four has been adjusted for regular seasonal variation.

Answer to the previous trivia question: Major League Baseball’s World Series was played outside the United States for the first time in 1992 when the Toronto Blue Jays defeated the Atlanta Braves in six games.

Today’s trivia question: Born in Sweden on this day in 1833, who is the inventor of dynamite who also lends his name to a major international prize?