Canadian manufacturing sales charged from the gate in August, according to figures released this morning by Statistics Canada. The numbers rose a stronger-than-expected 1.5% in August following 0.8% and 0.5% declines in July and June that were smaller than previously reported 1.5% and 0.8% declines, respectively.
Much of the overall gain in August reflected a sizable 8.6% jump in petroleum and coal sales following an upwardly revised 6.6% (was previously reported as flat) gain in July. The gains in petroleum and coal sales in July and August reportedly reflected a return to normal production levels after maintenance shutdowns weighed on production and sales in the second quarter (Statistics Canada also noted that the data for some of these refineries are currently under review, suggesting the potential for larger-than-normal revisions in coming months).
Sales of motor vehicles also rose solidly, climbing 4.4% in August to more-than-retrace a 3.1% decline in July. Along with a 2.5% gain in aerospace sales, this pushed sales in the transportation sector up 2.7% in the month. Outside of the autos, petroleum, and aerospace components, sales slipped 0.1% with strength in machinery (0.8%) and computer & electronics (2.3%) sales offset by declines in the primary (-3.1%) and fabricated (-1.2%) metal components.
Excluding the impact of prices, the volume of sales rose 1.8% in August to more-than-reverse a revised 1.2% decline in July that was smaller than the previously reported 2.0% drop.
On a regional basis, higher sales were reported in eight provinces in August although the majority of gains were concentrated in Ontario (2.5%) and New Brunswick (7.8%). Some offset was provided by lower sales in Quebec (-0.3%) and Manitoba (-4.7%).
The gain in the volume of manufacturing sales in August bodes well for the manufacturing component of GDP to rise solidly in August, according to experts at RBC Economics, likely at a faster pace than the 0.6% increase in July.
"In addition," they say, "we expect the end of maintenance work at some oil refineries in the oil sands will be reflected in a strengthening in mining, oil and gas extraction following three consecutive monthly declines."
