High prices boost manufacturing sales
Gains led by petroleum and coal product industries as price rise offsets drop in volume sold, StatCan says
Canadian manufacturing sales and wholesale trade figures climbed higher in March, but the gains came due to higher prices.
Statistics Canada said Monday manufacturing sales rose 2.5 per cent to $70.2 billion in March, however sales in constant dollars were unchanged.
Meanwhile, wholesale sales rose 0.3 per cent in March to $79.8 billion, but in constant dollar terms sales fell 0.6 per cent for the month.
Nikita Perevalov, director of economic forecasting at Scotiabank, said the disappointing figures sowed some doubts about the durability of Canadian economic growth.
“The two releases showed relatively weak growth after stripping out strong price increases, which might be a reflection of economic conditions more broadly,” Perevalov wrote in a report.
“While the weakness in the data releases this morning could be chalked up to volatility in the context of lockdowns and reopenings during the Omicron wave in Canada, it also fits the overall global macroeconomic narrative where strong price increases for all manner of goods and services combine with a weakening of growth in what is called a ‘stagflation.’ ”
Statistics Canada said the gain in manufacturing sales were led by the petroleum and coal product industry, which increased 9.1 per cent in March as higher prices offset a 1.0 per cent drop in volumes sold.
Meanwhile, sales of primary metals rose 6.5 per cent in March to $5.8 billion, a record high, boosted by higher prices for unwrought aluminum and aluminum alloys and hot-rolled iron or steel products.
Statistics Canada said prices for many primary metals were up with tight global supply due to COVID-19 restrictions in China and sanctions against Russia because of its invasion of Ukraine.
Sales in the machinery sector fell 4.9 per cent to $3.6 billion in March, while sales of other transportation equipment dropped 41.0 per cent to $227.8 million which was attributed to seasonal changes in the production of recreational transportation equipment.
The gains in wholesale sales came as the building material and supplies sector rose 3.8 per cent to $14.1 billion, while the motor vehicle and motor vehicle accessories and parts subsectors gained 2.6 per cent at $11.8 billion.
Meanwhile, wholesale sales of machinery, equipment and supplies fell 4.0 per cent to $16.2 billion.