Friday, February 27th3.2°C
25154
23613

Canadian factories beat expectations, continue to rebound from harsh winter

OTTAWA - Canada's troubled factory sector continued on the road to recovery, with a post-recession high of $50.9 billion in seasonally adjusted sales in March that built on an unusually strong result the previous month.

Economists had expected a slight decline after February's robust 1.4 per cent expansion, which was revised a tick higher.

But sales rose 0.4 per cent in value terms and an even healthier 0.5 per cent in volumes in March, with food, machinery, and plastics and rubber product industries leading the way.

Still, economists note that the recent expansion — the sixth in seven months — only partly makes up for previous downturns in terms of volumes of output, which is directly tied to economic growth.

The recent rebound is unlikely to add significantly to gross domestic growth in the first quarter, which ended March 31, economists said.

"The persistent underlying weakness in manufacturing sales volumes still suggests that hopes for a pick-up in overall economic growth remain overly optimistic," explained David Madani, chief economist with Capital Economics.

"Given the high export-intensity of the manufacturing sector, it still seems that the export-led recovery is a long way off."

That pessimistic view is not shared by all analysts, or the Bank of Canada, which is counting on the building momentum in the U.S. economy, along with the lower loonie, to increase demand for Canadian products south of the border.

Still, as far as the first quarter is concerned, March's modest gain does not change the overall picture of a 1.5 to 2.0 per cent growth rate to the start of 2014 that has been held back by more severe than usual winter conditions in Canada and especially the U.S.

TD Bank economist Jonathan Bendiner said Canada's manufacturing sector can expect to benefit from the U.S. recovery going forward, although not as much as it might have in past recoveries.

"Competitive challenges do remain for the sector," he pointed out in a note to clients. "The recent Bank of Canada Monetary Policy Report highlighted how a loss of U.S. market share by non-commodity Canadian exporters has contributed to the recent disconnect between rising foreign demand and non-commodity export performance. The bank's base case projections continue to assume that 'non-commodity exports will grow at a somewhat slower pace than foreign demand.' "

There was more cautionary news in the Statistics Canada report. While actual sales rose, the pipeline going forward appeared to have run out of steam.

Unfilled orders fell 0.8 per cent, and new orders plummeted 19.9 per cent, although both were coming off massive increases the month before.

Statistics Canada said the new orders generally "returned to normal levels after a jump in February."

Overall, sales were up in 11 of 21 industries, representing approximately two-thirds of the manufacturing sector.

Increases were largely offset by declines in the paper and petroleum and coal products industries.

The Canadian Press


Read more Business News

24497


Recent Trending




Today's Market
S&P TSX15234.34-6.82
S&P CDNX706.73+5.80
DJIA18132.70-81.72
Nasdaq4963.528-24.362
S&P 5002104.50-6.24
CDN Dollar0.7996+0.0004
Gold1203.00+6.10
Oil52.14+1.53
Lumber297.20+1.20
Natural Gas2.895-0.007

 
Okanagan Companies
Pacific Safety0.12+0.005
Knighthawk0.010.00
QHR Technologies Inc1.55-0.03
Cantex0.035-0.005
Anavex Life Sciences0.190.00
Metalex Ventures0.035-0.005
Russel Metals25.38+0.08
Copper Mountain Mining1.30+0.04
Colorado Resources0.15+0.015
ReliaBrand Inc0.008-0.0007
Sunrise Resources Ltd0.05+0.015
Mission Ready Services0.235+0.025

 





FEATURED Property
2141170#154 1651 Lynrick Road
3 bedrooms 3 baths
$309,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Creating your retirement vision

A vision means different things to different people. To the head of a large corporation, it’s the ability to chart a course that will deliver success (think Steve Jobs and Apple), to a shaman, i...


It's OK to say 'I'm sorry'

Photo: ContributedStand-up comedians and sitcoms have been making fun of Canadians for being polite as long as I can remember. Being known for our niceness is certainly not a bad thing and I wish more...


Are you asking the right questions?

Have you ever had this happen to you? You are in the middle of your second or third good discussion with a prospect and everything seems to be going great. The prospect seems engaged and happy to work...

_








Member of BC Press Council


24697