Canadian Factory Sales Rebound With Stronger-Than-Expected Gain
Canadian factory sales recorded a stronger-
than-expected rebound in May, adding to signs of improving
health for the nation's manufacturers.
The value of factory sales rose 1.4 percent, more than
making up a 1.1 percent decline the previous month, Statistics
Canada reported Tuesday from Ottawa. The May increase came as
gains in machinery helped make up for a sharp decline in auto
production during the month. Economists had been anticipating a
0.4 percent gain for May according to a Bloomberg survey.
The recovery highlights how manufacturing is benefiting
from a robust U.S. economic expansion and a weaker Canadian
dollar, and the gains should reinforce expectations that
factories will continue to provide a bigger contribution to
growth than they have for much of the past decade --
particularly as consumer spending slows.
Sales in May rose in 14 of 21 industries, representing 64
percent of the total. Excluding autos, sales were up 2.6
percent, the fastest since 2011. The gain was driven by an 8.9
percent gain in machinery sales. In volume terms, total sales
were up 0.9 percent.
The strong increase in other sectors masked a sharp drop in
motor vehicle shipments, down 6.6 percent. In previous reports,
Statistics Canada said there were supply disruptions in the
sector during the month.
Other indicators show the outlook for shipments remains
positive. New orders were up 4.9 percent in May, and are 11.9
percent above year ago levels.
With this release, Statistics Canada also begun publishing monthly capacity utilization rates for manufacturing. Unadjusted capacity utilization increased to 81.9 percent in May, from 80.6 percent in April, the statistics agency said.
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