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A worker solders together solar cells as they come out of the main panel assembly machine at the Solgate Inc. solar panel assembly plant in Toronto, Ontario, Canada, on Tuesday, Aug. 4, 2015.James MacDonald/Bloomberg

Canadian factory sales rose by less than half the pace economists forecast in June with gains in automobiles and chemicals tempered by a drop in metals.

Sales climbed 1.2 per cent to $50.8-billion, Statistics Canada said Friday in Ottawa. Economists forecast a 2.7 per cent increase according to the median of a Bloomberg survey with 17 responses.

Motor vehicle receipts rose 4.2 per cent to $4.89-billion in June and chemical sales advanced 5.4 per cent to $4.11-billion. Fabricated metal products fell 8.2 per cent to $2.63-billion in June, while petroleum and coal products fell 1.2 per cent to $5.46-billion for a 28.2 per cent drop over the prior 12 months.

Sales remain below a peak of $53.7-billion set in July 2014 as manufacturers fail to capitalize on a weaker Canadian dollar and signs of a U.S. recovery. Faltering exports of non– energy goods have been a puzzle to the Bank of Canada, which cut interest rates for the second time this year on July 15.

"Finally, some evidence that Canadian manufacturing isn't just sliding off into the abyss, but the news wasn't nearly what we were hoping for," Avery Shenfeld, chief economist at CIBC World Markets in Toronto, wrote in a research note.

Canada's dollar was little changed at $1.3065 per U.S. dollar at 11:01 a.m. Toronto time. The currency reached the weakest since 2004 on Aug. 5 at $1.3213 per U.S. dollar.

Election Campaign

Manufacturing weakness has become an issue in Canada's Oct. 19 election, with Prime Minister Stephen Harper touting free trade agreements and reduced taxes as benefits to the industry. Tom Mulcair of the New Democratic Party says that 400,000 high– paying factory jobs have been lost.

Excluding price changes, a better indicator of the industry's contribution to economic growth, factory sales rose by even less in June with a 0.5 per cent increase.

Unfilled orders fell for a fifth month in June, the longest streak since 2009. The 1.8 per cent monthly decrease to $93.8-billion means unfilled orders have fallen by 6.6 per cent over those five months, Statistics Canada said.

Inventories fell 0.5 per cent to $71.9-billion, with the ratio of factory stockpiles to sales falling to 1.42 from 1.44 on a monthly basis.

New orders rose 0.6 per cent to $49-billion.

–With assistance from Erik Hertzberg in Ottawa.