Canada's fac­tory sales reach record in Jan­uary, beats fore­casts

The Pak Banker - - 6BUSINESS -

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.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.