Another sign emerged this morning that maybe the economy is moving in the right direction.
Figures released by Statistics Canada showed that Canadian manufacturing sales unexpectedly jumped 1.0% in October, building on a 0.6% increase in September. Markets expected a 0.3% drop ahead of the report.
Sales of durable goods were down 0.5% in October, led by declines in motor vehicle (-1.9%) and aerospace (-4.5%) sales; however, offset was provided by a 2.6% jump in sales of non-durable manufactured goods, most of which reflected a 6.9% surge in food sales and a 2.8% rise chemical product sales.
Controlling for the impact of prices, the volume of manufacturing sales also jumped 1.0%, matching the 1.0% increase in September. On a year-over-year basis, the volume of sales increased at a 1.5% rate in October, the first annual increase since February 2013 and the strongest year-over-year growth since August 2012.
"The monthly pickup in sales volumes," according to RBC Economics, "suggests that manufacturing output likely provided another solid support to monthly GDP growth in October following a 1.1% increase in the manufacturing component of GDP in September.
"Reports on wholesale and retail sales later this week," the bank continues, "will provide further clarity on the monthly pace of growth in the services sector although the gain in manufacturing volumes reported today points to some early upside risk to our prior monitoring that GDP growth slowed to 0.1% in October following stronger 0.3% gains in each of September and August."
