- Organization for Economic Cooperation and Development
Canada's manufacturing sales rose for the third straight month in July, supported by increased sales in the motor vehicle parts and assembly industries. Factory sales increased 1.7%, beating economists' expectations for a gain of 1.0%. Figures for May and June also were revised higher. In volume terms, sales rose 1.1% in the reported month. Higher sales in vehicles and parts accounted for nearly two-thirds of the overall increase. Parts sales soared 12.1%, while sales in the vehicle assembly sector surged 5.6%. Meanwhile, inventories climbed 1.1%, driven by the transportation equipment industry. The inventory-to-sales ratio, which measures how long it would take to deplete stockpiles if sales were to stay at their current levels, stayed unchanged at 1.40 in July. In terms of future sales, unfilled orders rose 2.7%, while new orders jumped 10.2%.
The latest GDP figures confirmed that the Canadian economy entered into a technical recession, as the second quarter growth contracted 0.5% for a second quarter in a row, in line with the BoC's forecasts. The blow to the economy was softened by a 0.5% surge in June, which offset some of the losses from April and May and suggested a solid start to the third quarter. The OECD cut its forecast for Canada by 0.4 percentage points to 1.1% for 2015, and reduced its 2016 outlook to 2.1%.
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