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Canada’s factory sales at post-recession high

Manufacturing sales across the country increased 0.4 per cent in March, Statistics Canada said, pumped up by food and machinery shipments.

Deborah Baic/The Globe and Mail

Canada's factories have chalked up their sixth sales gain in seven months.

Manufacturing sales across the country increased 0.4 per cent in March, Statistics Canada said Thursday, pumped up by food and machinery shipments.

Those gains were offset by sinking sales in the paper, oil and coal sectors.

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Notable in the Statistics Canada report was a plunge of 19.9 per cent in new orders, however, which had been expected given a bounce in February related to defence orders.

At $50.9-billion, shipments are now at a seasonally-adjusted post-recession peak.

Still, shipments climbed in 11 of 21 sectors measures, accounting for about two-thirds of industry.

The food sector did particularly well, with sales up 2.1 per cent, with the heftiest increases in meat and dairy.

Also doing well were sales of machinery, up 3.3 per cent, and plastics and rubber, up 2.7 per cent.

Quebec, in particular, turned in a strong showing because of big gains in its aerospace and related industries, though that sector is traditionally volatile.

"The second consecutive monthly gain in the volume of manufacturing sales in March is encouraging and suggests that activity in the sector continued to recover from weather-related weakness earlier in the winter," said economist Nathan Janzen of Royal Bank of Canada.

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"In terms of implications for GDP growth, a slower pace of inventory accumulation in March suggests that sales growth was stronger than production growth in the month which points to the manufacturing component of March GDP remaining little changed after increasing 0.6 per cent in February … We continue to expect, however, that stronger U.S. demand and a weaker Canadian dollar will support increases in manufacturing activity while a further near-term rebound from weather-related weakness will contribute to a stronger 3-per-cent growth rate in Q2 GDP."

Over all, inventories across Canada inched up 0.2 per cent, while the inventory-to-sales ratio was steady at 1.41.

Unfilled orders declined by 0.8 per cent.

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