Manufacturing sales rise for 3rd straight month in May

The 3 Week Diet

Manufacturing sales grew by 1.1 per cent to $54.6 billion in May, better than what economists were expecting and the third straight monthly gain.

Statistics Canada said the transportation equipment and chemical manufacturing industries led the advance.

Economists had expected a gain of 0.8 per cent for the month, according to Thomson Reuters.

Sales were up in 16 of 21 industries, representing 71 per cent of the manufacturing sector.

“May marked a good month for Canadian manufacturing,” TD Bank economist Michael Dolega said. “The solid volume print in May suggests healthy activity during the second quarter.”

Transportation equipment sales rose 4.2 per cent to $11.5 billion on the back of the motor vehicle and the motor vehicle parts industries. Chemical manufacturing sales climbed 2.4 per cent to $4.4 billion.

In constant-dollar terms, overall sales were up 1.1 per cent, indicating that it wasn’t just higher prices that boost the figure — more total goods were sold, too.

But Dolega says the strong manufacturing numbers might not last.

“The recent spike in the loonie’s value on account of tighter monetary policy by the Bank of Canada will likely pose some downside to growth,” he said. “And the sectoral outlook may be further complicated by the upcoming NAFTA renegotiations, with the U.S. Trade Representative publishing rather stringent objectives this week. Discussions will likely begin in mid-August and are likely to last for some time given significant sticking points.”


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