Recovery increasing pace, latest data shows

Tue Mar 16, 2010 11:05am EDT
 
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By David Ljunggren

OTTAWA (Reuters) - Canada's economic recovery is picking up pace with January manufacturing sales higher than expected and labor productivity rising for the first time in more than a year, official data showed on Tuesday.

Analysts enthused about the figures, saying it showed Canada was well over the worst of the recession.

"We saw a pair of very encouraging reports spill out of Statistics Canada today, which together suggest that the recovery is deepening and taking on a healthier glow," said Douglas Porter of BMO Capital Markets Economics.

The minority Conservative government has so far taken a more cautious line, stating repeatedly that the recovery is still fragile and the jobless rate is too high.

Ottawa is also keeping a close eye on the strengthening Canadian dollar, which manufacturers say makes it harder for them to sell their goods.

Statscan said the value of manufacturing shipments rose by 2.4 percent in January from December, the fifth consecutive monthly increase. Analysts had predicted a 0.5 percent rise.

"This is undoubtedly a very strong report, and it suggests that the manufacturing sector is continuing to fire on all cylinders, defying the adverse impact of the strong Canadian dollar and the weak U.S. economy," said Millan Mulraine of TD Securities.

Labor productivity rose 1.4 percent in the fourth quarter of 2009, the first increase in more than a year and the highest quarterly growth rate for almost 12 years.   Continued...