Nathan Janzen, senior economist at the Royal Bank of Canada, notes that the Canadian manufacturing sales rose 2.1% in March after falling 0.2% in February.
“The bounce-back in manufacturing sales is consistent with other indicators suggesting that much of a pullback in overall economic output in February was tied to transitory bad-weather effects that temporarily limited transportation capacity.”
“Earlier February GDP data suggested that rail capacity in particular was limited by cold weather in February and export volumes also bounced back in March after a soft prior month. The increase in March manufacturing sales was led by a 4% jump in motor vehicle sales and a price-led jump in petroleum & coal sales.”
“The manufacturing numbers mean that overall economic growth probably returned at least modestly to the positive column in March after GDP declined 0.1% in February. Growth for Q1 as a whole still looks likely to be on the soft side – at a touch less than 1%.”
“We continue to expect a ‘rebound’ to a 2% rate in Q2 as some of the transitory disruptions that plagued activity in Q1 (bad weather, Alberta oil & gas production curtailments) ease.”