Surprise jump in Canada factory sales could lift growth
By David Ljunggren
OTTAWA (Reuters) - Strong food shipments pushed Canadian factory sales in October to their highest level since May 2012, an unexpected development that could help underpin fourth-quarter economic growth.
Statistics Canada said on Tuesday that manufacturing sales in October rose by 1.0 percent from September to hit C$50.09 billion ($47.25 billion). Analysts had forecast a 0.3 percent decline.
Overall factory shipments rose by 2.6 percent from October 2012, the biggest year-on-year jump since a 3.6 percent increase recorded in July 2012.
Since the 2008-09 recession Canadian companies have struggled to cope with weak markets and a strong Canadian dollar. Many analysts are looking for signs the manufacturing sector might be starting to recover.
"The print points to gross domestic product upside in the fourth quarter," said Derek Holt of Scotiabank Economics.
"November's strong industrial output in the U.S., which was focused on autos, has us expecting autos strength in Canada in November too. The bottom line is that manufacturing is looking up for the fourth quarter," he said in a note to clients.
The Bank of Canada forecasts annualized GDP growth of 2.3 percent in the fourth quarter, down from 2.7 percent in the third.
Food sales jumped by 6.9 percent in October - the largest gain since the current Statscan series started in January 1992 - on noteworthy gains in the meat, dairy, other food and grain and oilseed milling sub industries. This year's Canadian canola crop was a record. Continued...