Canadian factory sales rose more than expected in July to a record, led by a jump in auto shipments.
Sales climbed 2.5 percent to C$53.7 billion ($48.6 billion), surpassing the previous peak of C$53.2 billion set in July 2008 before the last recession, Statistics Canada said today in Ottawa. The growth in shipments was the fastest in more than three years. Economists forecast a 1.1 percent increase according to the median of a Bloomberg survey with 16 responses.
The data add to evidence the world’s 11th largest economy is picking up steam, along with the widest trade surplus in almost six years and a record level of building permits. Bank of Canada Governor Stephen Poloz has said a shift to growth powered by exports and business investment rather than indebted consumers is key to erasing slack in the economy.
Canadian Imperial Bank of Commerce chief economist Avery Shenfeld said in a note to clients the “scorching” report should help lift the Canadian dollar ahead of a speech by Poloz at 12:30 p.m. New York time on the role of a floating exchange rate in the economy. The Canadian dollar appreciated 0.4 percent to $1.1007 following the release of the factory figures.
The July increase was led by a 10.3 percent rise in transportation equipment sales to C$10.1 billion. Within that category, motor vehicle sales climbed 11.6 percent to C$5.11 billion. Statistics Canada said the auto data may have been inflated by an unusually low number of plant shutdowns during the month.
Primary metal shipments rose 4.0 percent from June to C$4.16 billion. Food manufacturing saw the biggest decline, falling 1.4 percent to C$7.91 billion. Sales rose in 16 of the 21 industries tracked by Statistics Canada, representing about 56 percent of sales.
Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales rose 2.8 percent, the agency said.
New orders increased 4.3 percent to C$54.2 billion, while unfilled orders increased by 0.6 percent to C$89.6 billion.
Inventories rose 0.1 percent to C$71.5 billion in July, with the ratio of factory stockpiles to sales falling to 1.33 from 1.36 in June.
Factory sales in July were 8.2 percent higher than a year earlier, Statistics Canada said.