Canadian manufacturing sales slipped 0.3% in March, below market expectations for a 0.5% increase, following a 2.8% (previously reported as 2.6%) increase in February and a 0.6% dip in January, according to figures released this morning by Statistics Canada.
Much of the weakness in the month reflected a price-led 2.6% drop in petroleum and coal sales, resulting from lower energy prices in the month, as well as a 2.0% drop in chemical sales that Statistics Canada noted may have reflected colder-than-normal weather crimping normal March fertilizer sales.
Excluding these two components, sales rose 0.3%, supported in part by a 1.5% rise in auto sales.
"Stronger wholesale sales and an expected modest gain in retail sales should still allow GDP to grow in March", according to experts at RBC Economics, "although likely at a slower pace than the solid 0.3% increases in each of the two previous months.
"Even with the slower pace of growth in March", the bank concludes, "this still remains consistent with our forecast that GDP growth in Q1 as a whole picked up to a 2.3% annualized pace which would still mark a notable improvement from the sub-1% growth rates over the second half of 2012 and would be above the Bank of Canada’s April forecast for a 1.5% Q1 gain."
