Nathan Janzen, senior economist at the Royal Bank of Canada, notes that the Canadian manufacturing sales dipped 0.6% lower in April while volume sales declined 0.8%.
Key Quotes
“The pull-back in manufacturing sales in April was not entirely surprising given an earlier soft international trade report for the month, and details were less concerning than the headline.”
“And a very strong month of economic data for the prior month in March, including growth in the manufacturing sector, still leaves overall GDP growth tracking at a slightly above 2% rate for Q2.”
“The removal of US steel & aluminum tariffs and Canadian retaliatory measures in May will help but rising US-China trade tensions appear to be weighing on the US industrial sector – and tight cross-border integration of production chains means some of that softness will spill over to Canada. That uncertainty, more than current economic data, is what we expect will keep the Bank of Canada firmly on hold in terms of interest rate policy for the foreseeable future.”
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