Canada factory sales drop as shutdowns hit oil refinery output

OTTAWA (Reuters) - Canadian manufacturing sales unexpectedly fell 1.3 percent in April from March as maintenance shutdowns cut output at oil refineries, Statistics Canada data indicated on Friday.

Analysts in a Reuters poll had forecast a 0.6 percent increase from March. Sales declined in 10 out of 21 industries, representing 49.6 percent of the manufacturing sector, while in volume terms, they dropped by 1.9 percent.

Sales in the petroleum and coal products industry slumped by 10.9 percent on lower volumes. Partial shutdowns at a number of refineries for maintenance work were a major contributor to the decline in volumes, Statscan said.

Sales of transportation equipment dropped by 2.3 percent on a 55.8 percent slump in the other transportation equipment category which includes military vehicles. Sales in the previous two months had been boosted by a big defense contract.

Inventories rose 2.2 percent to a record high, the seventh consecutive monthly increase, on higher reserves in the petroleum and coal products industry.

The inventory-to-sales ratio hit 1.44, the highest since the 1.48 recorded in August 2009.

(Reporting by David Ljunggren; Editing by Bernadette Baum)