WRAPUP 1-Canada February factory sales surge, new orders fall

Tue Apr 16, 2013 10:08am EDT
 
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* Sales jump 2.6 pct vs estimate of 0.9 pct gain

* New orders fall 4 pct, inventories at 4-year high

* Foreigners divest C$6.3 bln from Canada in month

OTTAWA, April 16 (Reuters) - Canadian factory sales surged in February at the fastest pace in 20 months, an encouraging sign for the economy after a downturn in January, although the number of new orders fell in the month, Statistics Canada said on Tuesday.

The stronger-than-expected data gave a slight boost to the Canadian currency, which pushed below C$1.0210 immediately after the data was released.

Manufacturing sales jumped 2.6 percent due to strength in auto assembly, food processing, petroleum and coal and miscellaneous sectors, the agency said, noting that higher prices explained much of the gain in the energy industry.

Economists said the strong print in manufacturing volumes bodes well for gross domestic product in the quarter, a rare break after a string of weak data that will likely force the Bank of Canada to scale back its growth forecasts in its quarterly Monetary Policy Report on Wednesday.

The performance beat market expectations of a 0.9 percent increase and was the biggest since July 2011. Still, the sales total of C$49.6 billion ($48.6 billion) was below the pre-recession peak of C$53 billion.   Continued...