Manufacturing sales up 0.2% in September

Canadian manufacturing sales edged up 0.2% in September to $58.5 billion, led by gains in the transportation equipment industry, StatsCan said Friday.

Economists had expected an increase of 0.3% for September, according to Thomson Reuters Eikon. The growth compared with a drop of 0.5% in August.

September’s growth was “largely a product of a rebound in motor vehicle production following some atypical shutdowns in August,” said Royce Mendes, director and senior economist at CIBC Capital Markets, in Friday commentary.

In addition, after taking into account an increase in prices, sales volumes in September were down 0.1%, said Stephen Brown, senior Canada economist at Capital Economics.

Despite signs of weakness in August and September, he said, growth in July “means that the manufacturing sector had a good third quarter.

“September’s rise in manufacturing sales capped off a strong quarter, but sales fell in volumes terms and the breakdown was hardly encouraging,” Brown wrote in a report.

He noted the outlook seemed softer.

“Although unfilled orders rose 0.4% in September, new orders declined by 0.3%. The inventories-to-sales ratio remains fairly elevated, suggesting that firms may eventually use those inventories up rather than increasing production,” he said.

Manufacturing sales in September were up in eight of the 21 industries tracked, boosted by a ramp up in production following auto assembly plant shutdowns in July and August that helped the transportation equipment sector increase 3.1%.

Sales in the chemical sector gained 1.4%, while the petroleum and coal product sector rose 0.9%.

Meanwhile, sales in the machinery industry fell 6.2%, while wood product sales dropped 2.9%.

Manufacturing sales in September were up in six provinces, led by Ontario and Newfoundland and Labrador.

Ontario’s rose 0.6% in September to $26.7 billion, while Newfoundland and Labrador’s climbed 21.0% to $648 million.

New Brunswick and Manitoba posted the largest sales decreases in dollar terms in September, at -9.3% to $1.5 billion and -8.8% to $1.6 billion, respectively.

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.