By Louise Egan
OTTAWA, Feb 15 (Reuters) - Canadian manufacturing sales recorded the biggest decline in about 3-1/2 years in December, due mainly to weaker auto production but also on lower sales across most other industries, Statistics Canada said on Friday.
Factory sales tumbled 3.1 percent in the month, the sharpest fall since May 2009 in seasonally-adjusted terms, compared with market forecasts for a 0.8 percent decline. The setback more than erased the 1.9 percent gain in November, revised from 1.7 percent previously.
Excluding the auto sector, sales fell 1.8 percent as 16 of 21 industries reported decreases, with the biggest downward pressure coming from chemicals, energy products and fabricated metals.
In volume terms, overall sales sank 3.8 percent.
The Canadian dollar weakened to C$1.0047 versus the U.S. dollar, or 99.53 U.S. cents.
Graphic - Canadian manufacturing sales:
Manufacturers have been hard hit by a strong Canadian dollar and weak U.S. export market, and although the overall economy has long recovered from the 2008-09 recession, manufacturers have yet to see sales climb back to pre-crisis levels.
The dismal data for December rounded off a mediocre year for the sector. In 2012 as a whole, factory sales rose 3.4 percent, less than half the 7.8 percent growth of 2011.
In December, sales by motor vehicle assembly plants plummeted 15.4 percent. While that sector normally undergoes temporary plant shutdowns in the final month of the year, Statscan said the decline in December 2012 was greater than usually observed.
New orders for manufactured goods fell 4.4 percent in December while unfilled orders increased by 2.6 percent.
Inventories fell 1 percent and the inventory-to-sales ratio -- a measure of how many months it would take to exhaust stock -- rose to 1.34 from 1.32 in November.
($ = $1.00 Canadian)
(Reporting by Louise Egan and Alex Paterson; Editing by Theodore d'Afflisio and Nick Zieminski) Keywords: CANADA ECONOMY/MANUFACTURING
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