Canadian manufacturing sales grow sequentially in March, outlook remains uncertain

Canada’s manufacturing sales grew in March after recording a drop in the prior month. Sequentially, manufacturing sales rose 2.1 percent, as compared with expectations of a rise of 1.5 percent. After accounting for price changes, the print was still encouraging, with volumes rising 1.6 percent.

Looking at details, the composition of gains was mixed, with 12 out of the 21 industries seeing a rise. Durable goods drove the rise, growing 2.9 percent sequentially. This was mainly due to solid transportation equipment sales on the back of a 7.1 percent rise in the volatile aerospace products and parts shipments category, and more significantly, a recovery in motor vehicle sales. Shipment of primary metals recorded a rise of 5.3 percent. Meanwhile, non-durable goods also rose 1.3 percent in March. This was mainly because of petroleum and coal products.

Region wise, manufacturing sales rose in 8 provinces out of 10. Ontario, Alberta, Quebec, and British Columbia recorded the gains. The Atlantic provinces recorded impressive gains, with sales in Newfoundland & Labrador up 14.5 percent, and sales in New Brunswick up 4.9 percent. Falls in Saskatchewan and Manitoba provided some offset. Inventories rose 1 percent, but improved shipments reduced the inventory-to-sales ratio to 1.50.

“For the first quarter as a whole, however, manufacturing sales volumes were up only a modest 0.3 percent, further confirmation of the soft patch that started the year. The release leaves our GDP tracking effectively unchanged at around 0.5 percent for Q1”, said TD Economics in a research report.

Manufacturing sales’ outlook continues to be uncertain.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 122.732 while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 74.4968 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex