Wednesday, July 16, 2014

Canadian Factory Shipment Powered By Petroleum and Automobile

Canadian manufacturing shipments rose more than expected in May as oil refineries resumed production after maintenance upgrades and auto-sector sales surged to their highest level in more than two years, Statistics Canada said Wednesday.

Factory sales increased 1.6% in the month, to 51.64 billion Canadian dollars ($48 billion). Market expectations were for a 1% advance, according to economists at Royal Bank of Canada. The level of sales was the highest since just before the onset of the global financial crisis in the fall of 2008.
Volumes rose 1.6% in the month.
The rise in factory sales was the fourth in five months. May's increase followed a small decline in April, and suggests there has been a pickup in activity among Canadian manufacturers, many of which produce goods for foreign markets. The increase will likely comfort to policy makers, who are banking on a revival in exports and business investment to drive Canadian growth as debt-fuelled consumer spending tapers off.
Even with the pickup in sales, from a low of C$38 billion set during the global recession, employment in Canadian manufacturing has declined. As of June, Canadian factories had shed 16,100 jobs over a 12-month period. The level of factory employment in Ontario, Canada's largest province and the heart of the country's manufacturing sector, hit a low in June not seen since 1976, according to a recent report by economists at BMO Capital Markets.
May's factory shipments were powered by two sectors: petroleum and coal products, and motor vehicles.
Sales in petroleum and coal products rose 7.2% to C$7.36 billion, which Statistics Canada said reflected a return to normal sales levels at "several" refineries that partially shut down in April for maintenance work.
Shipments in the motor-vehicle sector increased 9.3% to C$4.89 billion, or the highest level since January 2012, as some plants resumed production after a partial closing in April.
Excluding motor-vehicle sales, Canadian factory shipments rose 0.9% in May to C$44.53 billion. A 2% decline in food processing offset some of the gains.

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