Canadian Factory Sales Reach Six-Month High on Transport
Canadian factory sales rose to a six-month high in November and unfilled orders rose to the most in more than three years as demand for automobiles and aircraft increased.
Sales climbed 1.7 percent to C$49.9 billion ($50.4 billion), reversing a revised 1.2 percent decline in October, Statistics Canada said today in Ottawa. The gain exceeded all 17 forecasts in a Bloomberg economist survey that had a median projection for a 1 percent increase.
Canada’s gross domestic product probably rebounded to a 1.5 percent annualized pace at the end of last year after disrupted energy production and weak investment slowed third-quarter growth to 0.6 percent, according to economists surveyed by Bloomberg News. Automakers such as General Motors Co. (GM) have been boosting Canadian production, most of which is sent to the U.S.
“A very strong report,” showing that “Canada is getting a benefit from rising U.S. auto activity,” said Emanuella Enenajor, an economist at Canadian Imperial Bank of Commerce in Toronto.
The report didn’t stem losses in the Canadian dollar as part of a wider decline among currencies in countries that rely on commodity exports, such as Australia and South Africa. Canada’s dollar weakened 0.9 percent to 99.42 cents per U.S. dollar at 10:06 a.m. in Toronto.
Motor vehicle sales rose 4.1 percent to C$4.61 billion in November and aerospace and parts gained 6.5 percent to C$1.34 billion. Unfilled orders gained 3.6 percent to C$64.1 billion, the highest since March 2009, Statistics Canada said.
Sales rose in 12 of 21 categories tracked by Statistics Canada, accounting for two-thirds of production. Primary metal sales rose 5.9 percent to C$3.97 billion and chemical sales increased 3.9 percent to C$4.05 billion.
Excluding price changes, a better indicator of the industry’s contribution to economic growth, factory sales rose 1.6 percent in November.
From a year earlier, sales rose 0.5 percent. New orders grew at the fastest pace since March 2011 in November, rising 6.2 percent to C$52.1 billion, a gain also led by transportation companies.
Bombardier Inc. (BBD/B) of Montreal said Dec. 6 Delta Air Lines Inc. agreed to buy 40 CRJ900 regional jets as the world’s second-largest carrier broadens its replacement of older planes. The firm order had a catalog value of about $1.85 billion, and options for 30 more would boost it to $3.29 billion.
Magna International Inc. (MG), North America’s largest auto- parts maker, forecast sales growth of as much as 7.9 percent for 2013 on Jan. 16 as the manufacturer seeks customers in new markets.
Canadian factory inventories fell 0.8 percent to C$65.5 billion in November, with the ratio of factory stockpiles to sales falling to 1.31 from 1.35.
Even with today’s factory gain, sales have stagnated since reaching about C$50 billion in December 2011.
Bank of Canada Senior Deputy Governor Tiff Macklem said in a speech last week that while near-term economic momentum has slowed, it should accelerate later this year. The central bank’s key rate has been 1 percent since September 2010 and economists forecast it will remain there at a decision on Jan. 23.
“A more robust international backdrop will be required to lift manufacturing activity outside of the transport equipment sector,” Mazen Issa, Canada macro strategist at TD Securities in Toronto, wrote in a client note. “We anticipate such a pickup will occur in the second half of 2013.”
The number of Canadians receiving jobless benefits fell by 4,470 in November from October, or by 0.8 percent, Statistics Canada said in a separate report today. From the year-ago month, the total number of beneficiaries fell 3.8 percent.
To contact the reporter on this story: Greg Quinn in Ottawa at email@example.com