- Desjardins Capital Markets
Canada's manufacturing sales increased in January, led by robust car shipments, marking the latest data in a series of positive readings on the non-resource side of the domestic economy, which has been derailed by the commodity-price rout. According to Statistics Canada, the value of factory sales jumped 2.3% month-on-month to a record C$53.13 billion, following an upwardly revised gain of 1.4% in the prior month. That was the third consecutive rise in manufacturing sales, and well ahead of the 0.5% increase economists had expected. In volume terms, January factory sales rose 2.4% and hit a level last recorded before the global financial crisis in 2008. Motor-vehicle sales, the main driver of growth, hit their highest level in more than 15 years. Even when auto-sector sales are excluded, manufacturing shipments climbed 1.2%. Measured on an annual basis, factory sales rose 5.6%, or the fastest 12-month gain since December 2014.
The data highlighted the buffer a weaker Canadian Dollar is providing to the economy, which struggles with lower commodity prices. Last week, the Bank of Canada left its benchmark rate unchanged at 0.5% and said non-energy exports are gathering steam, particularly in sectors that are sensitive to exchange-rate movements. The central bank noted, though, the economy still faces strong headwinds as business investment remained "very weak" due to a retrenchment in the resource sector.
© Dukascopy Bank SA