Canadian manufacturing sales rise sequentially in March

Canadian manufacturers saw a strong month again in March, with manufacturing sales rising 1.4 percent sequentially after a considerably upwardly revised rise of 2.7 percent in February. Most of the rise came through price growth, but volumes were still up a modest 0.6 percent. Durable goods manufacturers led the way again, recording a 2.2 percent sales rise, as strong climb in the aerospace sector countered a pull-back in motor vehicle sales. Performances were generally solid throughout the other durable sectors, with the marked exception of machinery. Among the non-durable industries, mixed performances were seen, with overall sales rising 0.4 percent.

Quebec contributed the most to March’s rises, up 2.9 percent sequentially. B.C and Saskatchewan also performed well, rising 4 percent and 5.6 percent, respectively. Inventories reached another record high of CAD 79.2 billion, rising for a sixth consecutive month, but sales growth was again solid enough to keep the inventories-to-sales ratio effectively unchanged at 1.39.

Inventories of future sales came in mixed. Unfilled orders grew for a second month, rising 1.5 percent, but new orders dropped a bit, although after a healthy rise of 7.4 percent in the prior month.

The Canadian economy continues to perform well, outside of the resale housing market, and beneath some idiosyncratic shocks early in the year, noted TD Economics in a research report.

“With factories running near full-tilt despite solid investment through 2017, there is a clear incentive for firms to continue building out their capacity to meet demand. We continue to expect that 2018's soft start will give way to an above-trend pace of growth through the remainder of the year, supported by continued business investment”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was highly bullish at 156.803, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 41.0725. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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