Canadian manufacturing sales rises sequentially in July

Canada’s manufacturing sales growth slowed slightly in July. On a sequential basis, manufacturing sales recorded a growth of 0.9 percent after last month’s upwardly revised 1.3 percent. Today’s print comes above expectations of a rise of 0.6 percent. After accounting for price changes, volumes rose even more impressive 1 percent.

Durable goods rose 0.5 percent, where solid gains in the transportation equipment sector contributed the most to the headline figure. This was slightly countered by falls in primary and fabricated metal product shipments. Non-durable goods rose 1.4 percent on account of increases in chemicals and petroleum and coal products shipments.

Region-wise, the rises were focused in Ontario, Alberta and Nova Scotia. The remaining seven provinces saw falls on the month. Inventories rose 1.2 percent, continuing their upward trend, whereas the inventory-to-sales ratio continued to be the same at 1.41. Forward looking were not as bright, with new orders falling 1.8 percent and unfilled orders unchanged compared to last month.

The report released today was strong for Canadian manufacturing sector and starts the third quarter on solid footing. The impressive rebound in motor vehicle sales more than countered the modest falls in primary and fabricated metal shipments, which were possibly because of steel and aluminium tariffs, noted TD Economics.

“Looking ahead, the positive release sets the stage for a decent third quarter and adds some upside risk to our real GDP forecast of 2.2 percent. Barring any material surprises in retail sales or inflation data releases later this week, today's number adds further credence to the expectation that the Bank of Canada will hike rates in October”, added TD Economics.

At 20:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bullish at 95.0195, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 22.3923. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex