Petroleum, coal spur Canadian factory sales rebound in June
August 16, 2018
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Canadian factory sales grew by 1.1 per cent in June from May, thanks largely to a rebound in petroleum and coal products after temporary shutdowns in the spring, Statistics Canada said on Thursday.
Analysts in a Reuters poll had forecast a milder 0.9 per cent increase. StatsCan revised May’s increase to a 1.5 per cent gain from an initial rise of 1.4 per cent.
Sales rose in 15 out of 21 industries, while declines were seen in chemicals and food products. Excluding vehicles and parts, manufacturing sales were up 0.9 per cent.
“With the overall increase in volumes coming in at 0.7 per cent, and inventories up slightly, the manufacturing sector should still be a modest positive contributor to monthly GDP,” CIBC Capital Markets economist Andrew Grantham wrote in a note to clients.
Sales of petroleum and coal products surged 15.9 per cent in June, boosting capacity utilization rates for the industry, which rose to 89.8 per cent in June from 69.8 per cent in May, StatsCan said.
Sales of chemical products, chiefly pesticides, fertilizers and other agricultural chemicals, were down 4.5 per cent in June after two straight monthly increases.
“This industry often posts significant growth in May and then declines in June following spring planting in the agricultural sector. This year, the decline in June was larger than previous years,” Statscan noted.
Sales of food products fell 1.7 per cent after four straight monthly gains, while primary metal sales edged down 0.3 per cent after four straight increases.