Canada's factory sales reach record in January, beats forecasts
Factory sales rose 2.3 per cent in January to a record $53.1-billion, surpassing even the most bullish forecast. This gain brought the inflationadjusted value of manufacturing sales back to levels not seen since the financial crisis.
The surge in manufacturing sales was primarily attributable to advances in automobiles, vehicle parts and food, and the decline in the Canadian dollar relative to the greenback over the past two years supported sales, Statistics Canada said in a report Wednesday from Ottawa.
The acute strength in those three manufacturing sub-sectors belied the broad-based nature of January's increase, which saw gains in 16 of 21 industries, according to Toronto-Dominion Bank Economist Brian DePratto.
"This is a pretty dynamite report," he said. "It's hard to find anything not to really like about it. This is more confirmation of our view that growth in the first quarter is likely to be north of 2 per cent."
The Bank of Canada called for growth of just 0.8 per cent in the first quarter of 2016. Governor Stephen Poloz urged patience as the economy undergoes a lengthy transition process in the wake of subdued resource prices.
"The drop in oil and other commodity prices constitutes a significant setback for the Canadian economy, and has set in motion a protracted adjustment process," Mr. Poloz said after the Bank's Jan. 20 interestrate decision.
"That will mean the continuation of a two-track economy, with the resource sector shrinking and other sectors picking up speed, all facilitated by a lower Canadian dollar and supported by very stimulative monetary policy."
The recent performance of portions of the Canadian economy sensitive to external demand and a lower currency suggests this re-balancing is well under way. Over this span, Canadian exports have also shown significant signs of life.