OTTAWA — A big jump in oil and coal sales helped to boost Canadian manufacturing sales in September, hinting that economic growth could have edged slightly higher than expected in the third quarter of the year.
Statistics Canada said Tuesday that manufacturing sales were up 2.6 per cent to $49.2 billion in September, their third straight monthly increase. The gain largely reflected higher sales in the petroleum and coal products and transportation equipment industries.
Sales of petroleum and coal products rose 13.7 per cent to $7.6 billion, the agency said, their largest percentage increase since March 1999, while transportation equipment sales rose 7.1 per cent to $8 billion.
The gain was twice what economists had expected, CIBC World Markets economist Peter Buchanan wrote in a note to clients.
“Adjust for inflation, sales were up by 1.8 per cent from the prior month, capping a strong quarter for factory activity,” Buchanan wrote.
“Today’s number could imply some upside for our estimate of three per cent gross domestic product growth in Q3.”
Despite a global economic slowdown and the possible threat of a return to recession in Europe, where government debt crises are far from having been settled, September had seen incremental hints of strength in the Canadian economy.
Earlier this month, Statistics Canada reported a surprisingly strong expansion in exports that gave the country its first trade surplus in eight months.
Analysts said the rebound in exports, despite considerable headwinds from Europe and the United States, likely pushed the increase in Canada’s gross domestic product to about three per cent in the third quarter. That would be one point higher than the Bank of Canada’s recently revised call.
However, forecasts from global organizations such as the International Monetary Fund, as well as central banks, and private sector economists have all recently pointed to slower global and domestic growth.
Bank of Canada governor Mark Carney last month projected the economy would slow to sub-one per cent growth in the last three months of this year, half of the expected rate of the third quarter.
On Tuesday, Statistics Canada said higher September sales were reported in 10 of 21 industries, representing 60.5 per cent of total manufacturing, with a three per cent decline in food industry sales partially offsetting the gains.
Stronger manufacturing sales were reported in nine provinces, with Alberta, Quebec, New Brunswick and Ontario leading the way. New orders rose 4.8 per cent to $51.0 billion.