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Canadian manufacturing sales rise above expectations in August
Canadian manufacturing sales rose in August. On a sequential basis, manufacturing sales rose 0.8 percent, after falling 1.3 percent in July. Consensus expectations were for a rise of 0.7 percent. Excluding price impacts, the picture was still encouraging, with manufacturing volumes rising 0.6 percent.
Out of the 21 industries, sales grew in 11. The rise was mostly driven by durable goods that rose 1.6 percent with transportation equipment and fabricated metal products contributing the most to the rise. The strength recorded in the transportation equipment category was comparatively widespread throughout the sub-categories, with the rises in the motor vehicles category aided by a production ramp-up after earlier shutdowns. Sales came in soft in the machinery and furniture sub-sectors.
Meanwhile, sales of non-durable goods dropped 0.1 percent, owing to a fall in petroleum and coal products. Providing some offset in the non-durables category were higher sales of plastic and rubber products.
Region wise, manufacturing sales rose in 7 of the 10 provinces. Quebec, Ontario and Saskatchewan led the way. On the contrary, sales dropped the most in British Columbia. Alberta’s manufacturing sales dropped the most in British Columbia. Alberta’s manufacturing sales came in flat on the month.
Inventories rose 0.5 percent, leaving the inventory-to-sales ratio roughly unchanged at a still-elevated 1.54. Forward looking indicators were encouraging. Today’s data tracks a 1.4 percent pace of third quarter growth, said TD Economics in a research report.
“With the U.S. economy experiencing a second straight month of contraction in its ISM manufacturing Index, manufacturing sentiment in contractionary territory in other major economies, and lingering global trade tensions still in play, we remain cautious on the outlook for Canadian manufacturers, especially those in export-intensive sub-sectors”, added TD Economics.