UPDATE 2-Canada Sept factory sales raise hopes of a comeback

Fri Nov 15, 2013 10:15am EST
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* Sales rise 0.6 pct in Sept vs estimate of 0.5 pct gain

* Cars and food were main drivers of sales growth

* Volumes up 1 pct; new orders slide 2.6 pct

By Louise Egan

OTTAWA, Nov 15 (Reuters) - Canadian manufacturing sales jumped in September to their highest since June 2012 on strength in the auto and food industries, an encouraging sign that the hard-hit sector may be rebounding and contributing to speedier economic growth.

Manufacturing sales grew 0.6 percent in the month, slightly above the 0.5 percent gain forecast by market operators, to C$49.9 billion ($47.5 billion). Sales were flat in August.

In volume terms, which matter most for gross domestic product growth, sales rose 1 percent in September.

"This is the first gain in the volume of shipments since the first quarter of 2012 ... it might feed sentiment that perhaps Canadian manufacturing is finally turning the corner,' said Scotia Capital economists Derek Holt and Dov Zigler in a note to clients.

"A caution against this is that the order book has been waning," they said.   Continued...