Canadian manufacturing sales rose 0.6% in September following a revised flat reading (was -0.2%) in August and a 1.9% (was 1.7%) gain in July. Statistics Canada says the increase in September was slightly above market expectations for a 0.5% rise.
Much of the strength in overall manufacturing sales reflected a sizable 5.4% jump in motor vehicle production, reportedly in response to "favourable market conditions" as well as the introduction of new 2014 models, that followed a 2.2% drop in August but a 3.3% rise in July. A 3.2% drop in the volatile aerospace component following a 16.6% surge in August provided some offset; however, overall sales of durable products were still up 0.6% in September.
The agency also says sales of non-durable goods also rose by 0.6%. A 2.6% jump in food sales provided the main source of support with some offset provided by a 0.7% drop in petroleum and coal sales.
"While the volume of manufacturing sales," according to experts at RBC Economics "remains subdued (still 0.5% below its year ago level), activity in recent months has shown signs of improvement.
"In terms of implications for overall economic activity," the bank concludes, "strength in September sales is consistent with our expectation that overall GDP rose 0.2% in the month and an annualized 2.8% in Q3."
