UPDATE 1-Canada factory sales rise more than expected in January

Wed Mar 16, 2016 8:40am EDT
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(Adds data from report)

OTTAWA, March 16 (Reuters) - Canadian manufacturing sales rose far more than expected at the start of the year, driven by a jump in sales of motor vehicles, auto parts and food, data from Statistics Canada showed on Wednesday.

The 2.3 percent increase in January topped analysts' forecasts for a gain of 0.5 percent and pushed sales up to a record C$53.13 billion ($39.8 billion). December was also revised up to a 1.4 percent gain.

While some of the month's increase was due to the depreciation of the Canadian dollar, which can increase prices, volumes were robust with a 2.4 percent increase. Volume levels were at their highest since before the 2008-2009 recession.

Sales of vehicles surged 9.6 percent, the biggest increase since March 2015. The weaker Canadian dollar and a shift toward production of higher-end, more expensive models boosted the sector. Vehicle parts sales rose for the fifth consecutive month with a 4.0 percent increase.

Food sales rose 4.6 percent with the volume of food sold the highest in more than 10 years. The report noted that the food industry is usually one of the more stable industries in the manufacturing sector.

The overall increase in sales could boost economic growth expectations for the month. After better-than-anticipated growth in the fourth quarter, analysts already expect the economy could exceed the Bank of Canada's 1 percent growth forecast in the first quarter.

($1 = $1.3358 Canadian)

(Reporting by Leah Schnurr Editing by W Simon)