- Benjamin Reitzes, BMO senior economist
Canada's manufacturing sales rose more than expected in March, Statistics Canada said. Manufacturing sales increased 2.9% to $51.0 billion in the reported month, the second gain in six months, led by a rise in the production of aerospace products and parts along with gains in the motor vehicle industry. Yet, a decline in sales of fabricated metal products partially offset the increase. The gain in March followed a 2.2% decrease in February, which was revised from a negative 1.7%. Sales in the motor vehicle industry jumped 12.8% in the reported month, after plummeting 18.9% in the previous two months. The declines in the first two months of the year reflected shutdowns for retooling at various plants in Ontario. The growth in March pointed to higher production as this work started to wind down. Meanwhile, inventories held by manufacturers declined 0.4% in March, the second drop in six months. The lower inventories reflected falls in the chemical, fabricated metal product and aerospace product and parts industries.
Meanwhile, Moody's Investors Service projected Canada's economic growth of 1.5%-2% this year and next due to the oil shock and worse-than-expected US performance. At the same time, the Bank of America, one of the US's biggest banks, said the Bank of Canada may have to lower its key lending rate again later this year.
© Dukascopy Bank SA