Autos lift Canadian manufacturing sales more than expected in May

FILE PHOTO - Ford and Lincoln vehicles are parked outside the Oakville Assembly Plant, as workers with UNIFOR attended a ratification vote nearby, in Oakville, Ontario, Canada November 6, 2016. REUTERS/Chris Helgren

OTTAWA (Reuters) - Canadian manufacturing sales posted the largest gain in five months in May, rising to a record level on higher sales of motor vehicles and parts, data from Statistics Canada showed on Wednesday.

The 1.1 percent increase to C$54.6 billion ($43.2 billion) from April topped economists’ forecasts for a gain of 0.8 percent and was the biggest increase since last December.

However, April’s sales were downwardly revised to show a gain of 0.4 percent from the originally reported 1.1 percent increase.

Overall, sales rose in 16 of the 21 sectors surveyed in May, accounting for 71 percent of overall manufacturing. Stripping out the effects of price changes, volumes were strong, up 1.1 percent.

Sales in the transportation equipment sector rose 4.2 percent, driving May’s gains as the vehicle and parts sectors saw sales volumes jump.

Among other sectors, chemical manufacturing sales increased 2.4 percent, led by pesticide, fertilizer and other agricultural industries. Such sales typically spike once farmers have seeded their crops in the spring, the statistics agency said.

New orders pulled back by 3.6 percent after five consecutive months of gains. Orders were weighed by decreased demand for aerospace products and parts, though that was offset by higher orders for vehicles.

Reporting by Leah Schnurr; Editing by Chizu Nomiyama