Canadian factory sales climbed in January at the fastest pace in almost a year as higher proceeds for steel producers countered falling car-maker revenue.
Sales rose 1.5 percent to C$50.4 billion ($45.6 billion), the fastest pace since February 2013, Statistics Canada said today in Ottawa. Economists in a Bloomberg survey predicted sales would advance 0.6 percent, the median of 18 forecasts.
Canadian manufacturing has been a drag on the economy for more than two years, with the value of monthly sales still below 2011’s post-recession highs. About 36,000 people in the world’s 11th-largest economy have lost manufacturing jobs since the start of 2013, even as global growth accelerated and the Canadian dollar weakened.
“We continue to expect that underlying conditions, including a strengthening in the U.S. economy and a weaker Canadian dollar, will support stronger manufacturing sales in the near term,” Nathan Janzen, an economist in Toronto at RBC Capital Markets, said in a report to clients.
Statistics Canada revised December’s factory sales drop to 1.5 percent from an initially reported 0.9 percent, and said January inventories climbed 3.6 percent, the most since at least 1992. Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales rose 0.7 percent.
January’s higher sales volumes and “outsized” inventory accumulation suggests the manufacturing component of gross domestic product may have expanded at an almost 2 percent pace in January, Janzen said in the report. Statistics Canada is due to report GDP data on March 31.
Canada’s dollar is down 7.5 percent versus its U.S. counterpart over the past 12 months. It was little changed at C$1.1050 at 11:13 a.m. in Toronto.
Sales in the primary metal industry rose 8 percent in January, in part due to higher prices, the agency said. Food producers saw sales rise 2.7 percent, while aerospace shipments were up 3.3 percent. Sales were up in 12 of 21 industries tracked by Statistics Canada, accounting for about 46 percent in manufacturing shipments, including gains for chemical producers and computer and electronic product manufacturers.
Shipments of motor vehicles fell 4.7 percent in January.
Unfilled orders rose 4.8 percent to C$78.4 billion and new orders increased 2.6 percent to C$53.9 billion in January.
Inventories rose to C$71.4 billion, pushing the ratio of factory stockpiles to sales to 1.42 from 1.39.