Canada: Manufacturing shipment data consistent with a 0.9% Q1 GDP growth – NBF


Manufacturing shipments in Canada rebounded sharply in March by 2.1%, following 0.2% decline in February. National Bank of Canada analyst Kyle Dahms, explains that the rebound in sales of transportation equipment were a key factor. 

Key Quotes:

“Manufacturing sales in Canada came in 6 tenths above consensus expectations in March. That impressive result can be traced back to the sales of transportation equipment which rebounded after three consecutive monthly declines. Even when excluding the sales of transportation equipment (+4.5%), manufacturing sales still rose a noteworthy 1.6% in the month. Part of that rise can be attributed to a third consecutive month of significant increases for the petroleum and coal products industry which jumped 3.2% in volume terms (i.e. excluding price effects in the month).”

“Looking at quarterly data, real shipments rose an annualized 1.3% in Q1 following a -2.6% read in the prior quarter. Moreover, real inventories were rising at a solid pace in the quarter. This is consistent with our view that Canada’s GDP growth may have reached 0.9% in the first quarter of 2019.”

“The unadjusted capacity utilization rate in Canada’s manufacturing sector, meanwhile, rose 2.2 percentage point to 80.7%.”

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