Today’s report from Canada showed that Manufacturing sales dropped 0.2% in February. Jocelyn Paquet, an analyst at the National Bank of Canada points out that looking further ahead, the manufacturing sector may still face some headwinds considering elevated inventories.
“February’s manufacturing sales came in just a tenth shy of the median economists forecast thanks to a healthy rebound in the petroleum and coal products segment, the latter boosted by rising energy prices in the month. Without petroleum and coal, however,
shipments fell no less than 0.9%, reflecting broad-based sectorial declines. Production in the wood products category, for instance, continued to shrink, settling 11.3% below its level a year ago.”
“Shipments of motor vehicles and parts have not fared much better in the 12 months to February (-8.0%) but the sharp rebound observed in auto sales in late Q1 suggests the segment might be poised for a comeback in Q2.”
“Looking at quarterly data, real shipments are on pace to slide an annualized 0.5% in Q1 following a -4.1% read the prior quarter which was the first decline registered since 2015Q4. This is consistent with our view that Canada’s GDP growth remained soft in the first quarter.”
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