February 27, 2003

Bank of Montreal predicts auto sales to decline by 6%

Toronto, Ontario - A report issued by the Bank of Montreal forecasts a 5.8% decline in the automobile production sector by the end of 2004 and a 5.0% decline in motor vehicle parts production. The bank also predicts auto sales in North America will decline by approximately six percent in 2003, and won't return to current levels until around 2005.

"The period 2003-2004 is characterized by a continuation and acceleration of the macroeconomic expansion which got underway in 2002, following the period of economic malaise in 2001. However, some sectors that do well in this type of environment are likely to falter. For instance, interest-sensitive sectors, such as home construction and motor vehicle manufacturing, are expected to face declining output as demand eases from above-normal levels during the past few years," said the report.

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