Nathan Janzen, senior economist at Royal Bank of Canada, notes that the Canada’s manufacturing sales increased 1.6% in May and the increase extends recent string of Canadian manufacturing outperformance relative to US.
“The increase in manufacturing sales in May was, as expected, largely concentrated in the transportation sector. Still, sales edged up 0.2% excluding transportation components, and have yet to decline on that basis in any month of this year.”
“To be sure, growth in the Canadian manufacturing sector has not exactly been spectacular – but sales volumes (i.e. excluding price impacts) were still up 3.5% from a year ago in May and 2.0% year-to-date in 2019.”
“For now, though, the domestic economic data continues to look a little better. And, with inflation also holding around 2%, is another reason the Bank of Canada won’t likely need to rush to follow the US Fed with a widely expected rate cut later this month.”