UPDATE 2-Jump in Canada factory sales seen boosting growth after dip

Tue Sep 17, 2013 10:35am EDT
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* Sales rise 1.7 pct vs estimate of a 0.5 pct advance

* Most industries report higher sales

* Analysts say healthy data should boost growth figures

By David Ljunggren

OTTAWA, Sept 17 (Reuters) - Canadian manufacturing sales jumped a much greater-than-expected 1.7 percent in July from June, a sign the economy is recovering after disruptions caused by floods in Alberta and a work stoppage in Quebec.

Analysts had predicted sales would rise 0.5 percent from June. The month-on-month increase was the largest since the 3.5 percent leap in February, Statistics Canada said on Tuesday.

Of 21 industries, 15 posted higher sales in July. Constant dollar sales grew 1.1 percent, indicating that most of the overall July increase was volume-based.

The Canadian economy, heavily dependent on the United States, has largely struggled to impress this year and June manufacturing sales were hit by both the floods and work stoppage. Analysts said the healthy factory sales figures were a sign growth could be picking up.

"The rebound in the volume of manufacturing sales in July is encouraging and suggests ... weakness in June was nonetheless temporary," said Nathan Janzen of RBC Economics Research.   Continued...