Exports ‘starting to show signs of life’
• Canada’s exporters appear to be finally delivering the goods.
Not only are the country’s manufacturers revving up sales volume, but they are doing it in record numbers according to the latest numbers for January — with food products, vehicles and auto parts driving much of the gain.
Statistics Canada said Wednesday that manufacturing sales jumped 2.3 per cent to $ 53.1 billion during the month, a record high, and far better than the 0.5- percent increase most analysts had hoped for and a sizable improvement on December’s 1.4-per-cent gain — although even that tally was revised upward from the previous estimate of 1.2 per cent.
When combined with the November growth reading, which the federal data agency also revised to 1.4 per cent from 1.2 per cent, this could mark a turning point for Canadian factories following the painful days during and following the 200809 recession.
“Canadian exports are starting to show signs of life,” Nick Exarhos, an economist at CIBC economics, wrote in a note to investors. Given the strong January export data, economic growth in the first quarter of 2016 will “easily surpass” the Bank of Canada’s one- per- cent forecast, he said.
The central bank will update its economic outlook on April 13, when it publishes its quarterly Monetary Policy Report and announces its decision on whether to adjust the bank’s trendsetting interest rate level, now at 0.5 per cent. That decision will incorporate spending details in the federal government’s 2016- 17 budget, which will be tabled on March 22.
On Wednesday, Statistics Canada said January sales increased in 16 of 21 industries tracked by Statistics Canada, making up more than 80 per cent of the country’s manufacturing sector.
“It’s a continuation of a trend we’ve been seeing over the past few years,” said Jason Myers, president CEO of the Canadian Manufacturers & Exporters.
“What it really shows is the strength of the export side. We’re benefiting from a stronger America economy and a more competitive dollar. But we’re also seeing volumes pick up as well, so that means manufacturing is not just benefiting from the currency exchange but also (we’re) selling more products — particularly in the U. S., but also internationally,” Myers said.
“That growth on the export side is offsetting the downturn in the energy market, particularly in the oilsands.”
Vehicle sales rose 9.6 per cent to $ 6.6 billion in January, the highest level since November 2000 and the biggest monthly increase since March 2015.