By Robb M. Stewart
OTTAWA--Canadian factory sales rebounded in April with the strongest increase in five months as motor vehicle sales recovered.
Manufacturing shipments rose 1.1% from the month before to a seasonally adjusted 70.80 billion Canadian dollars, the equivalent of about US$51.52 billion, Statistics Canada said Friday.
The result was just shy of the data agency's advance estimate for a 1.2% advance for the month, and follows a 1.8% drop in March sales, revised from an earlier reported 2.1% drop.
Sales in constant dollars, or volume terms, were up 0.4% for the month to C$55.31 billion, an indication of much of the increased trade was thanks to higher prices. The industrial product price index was 1.5% higher in April, a third consecutive increase.
Wholesale trade also increased, with April sales increasing 2.4% to C$83.35 billion, or 2.0% in volume terms, buoyed by the recovery in vehicle sales, Statistics Canada data showed.
Canada's economy strengthened in the early months of the year, with gross domestic product expanding at an annualized rate of 1.7% for the first quarter after stalling in the second half of 2023. At the same time, inflation has continued to ease, allowing the Bank of Canada to earlier this month to pivot to a policy interest rate that had sat at a more than two-decade high.
The central bank has forecast economic growth will average 1.5% this year thanks to strong population growth, and pick up to about 2% in 2025 and 2026. An earlier estimate by Statistics Canada suggests industry-level GDP rose 0.3% in April from the month before after essentially no change in March.
Still, Canadian manufacturing has struggled for much of last year. S&P Global's Canada manufacturing purchasing managers' index has been in contraction territory for more than a year, and the latest data showed a fall in May as output and new orders declined once again.
Statistics Canada's manufacturing survey showed the recovery in sales was led by a 5.6% increase in motor vehicle trade and 7.7% rise in parts sales. The bounce back from weakness in March came as some auto manufacturers managed to sell more vehicles despite the industry continuing to be squeezed by retooling at some assembly plants for new vehicle models. Even with the rise in sales, exports of motor vehicles and parts fell 2.2% in the latest month.
Excluding motor vehicles, parts and accessories, manufacturing sales rose by a more modest 0.5% from the month before as increased sales of primary metals and chemical products was partially offset by lower production in the aerospace products and parts industry.
Inventory levels held by factories edged down 0.2% in April, hitting the lowest level since November 2022, the agency said. Unfilled orders, the stock of orders that will contribute to future sales if they aren't canceled, ticked up 0.2% for the latest month and new orders were climbed 3.1%.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
06-14-24 0851ET
