MRO Magazine

Manufacturing sales edge up in July, below expectations


September 19, 2016
By The Canadian Press

Ottawa – Canadian manufacturing sales came in below expectations in July, edging up just 0.1 per cent to $50.7 billion, Statistics Canada said Friday.

Economists had expected a gain of 1.0 per cent, according to Thomson Reuters.

Statistics Canada said on a constant-dollar basis, sales increased 0.6 per cent in July, indicating that a higher volume of goods was sold.

TD Bank economist Dina Ignjatovic said the rebound in manufacturing over the last two months has been welcome, but sales have yet to make up all the ground lost earlier this year with volumes two per cent below January levels.


“The revival of the manufacturing sector in June and July provides a strong handoff for the third quarter,” Ignjatovic wrote in a report.

“We expect manufacturing volumes to remain strong in the coming months, helping to lift overall economic growth in the second half of the year and into 2017.”

The Canadian economy pulled back in the second quarter as it was hit by the wildfires in Fort McMurray, Alta., which shut down production in the oilsands, and weaker than expected exports.

However, economists expect the economy to bounce back in the third quarter.

“We continue to expect, broadly in line with the Bank of Canada’s view, that underlying activity will strengthen modestly over the second half of this year as non-energy exports rise and the drag from the oil and gas sector continues to ease,” Royal Bank senior economist Nathan Janzen wrote in a report.

Manufacturing sales in July were up in nine of 21 industries, representing about 54 per cent of the manufacturing sector.

The food industry gained 1.9 per cent to $8.5 billion in July, while the primary metals industry grew by 2.9 per cent to $3.7 billion.

Sales of petroleum and coal products climbed 2.5 per cent to $4.3 billion, boosted by higher volumes at several oil refineries that helped offset lower energy prices.

However, the volatile aerospace product and parts industry dropped by 9.0 per cent to $1.5 billion in July for a second consecutive monthly decline. Machinery sales fell 3.3 per cent to $2.6 billion, while motor vehicle parts declined by 2.5 per cent to $2.5 billion.

Sales were up in five provinces in July, with Quebec posting the largest gain in dollar terms, up 0.9 per cent at $11.9 billion. British Columbia gained 2.2 per cent to $3.8 billion.