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Data released today showed that manufacturing shipments dropped 1.2% in June in Canada, a smaller-than-expected decline. According to National Bank of Canada analyst Jocelyn Paquet, the slowdown in June won’t derail stellar quarter for Canadian factories

Key Quotes:

“Canadian manufacturing sales fell in June but less than anticipated. What’s more, much of the monthly retreat stemmed from lower prices, especially in the petroleum/coal segment. Indeed, prices in that sector fell no less than 4.9% in June, a development which partly explains the sharp pullback in nominal shipments in Alberta (-6.5%) and Newfoundland & Labrador (-17.5%), the country’s two main oil-producing provinces.”

“While this should translate into a negative contribution to growth from factory output in June, the quarterly perspective remains very encouraging. Following a 2.0% increase in the first quarter of the year, real shipments advanced at a 7.3% annualized pace in Q2 thanks to the excellent handoff from March and a strong print in May.”