Canada: Manufacturing sector should contribute to economic growth in Q2 - NBF

Data released today showed that shipments of manufactured goods fell in April in Canada and May’s numbers were revised higher. Kyle Dahms, an analyst at the National Bank of Canada’s analyst, explained that the overall manufacturing sales decline will hurt April GDP, the inventory surge will provide some offset.

Key Quotes:

“Manufacturing sales in Canada came in 1.0% below consensus expectations in April largely due to the transportation segment. Excluding the latter category (which tends to be volatile), shipments actually rose 0.8% in the month thanks to a sizeable gain for food manufacturing and the fourth consecutive month of significant increases for the petroleum and coal product industry which rose 2.9% in the month and 25.7% year to date.”

“While the overall sales decline will hurt April GDP, the inventory surge will provide some offset. Looking at quarterly data, following a 1.3% increase in the first quarter of the year, real shipments are on track to rise an annualized 2.1% in Q2 after one month of data, thanks in part to the excellent handoff from March.”

While this morning’s report shows that the manufacturing sector should contribute to economic growth in Q2, an indicator is blipping on our radar. Indeed, no less than 16 of the 21 industries are showing an increase in their inventory-to-sales ratio since the end of 2017. In the current context of trade uncertainty, this ratio standing at a post-recession high could be a headwind to growth in the coming months.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD under pressure just above 1.1000

Despite easing demand for the greenback, the EUR/USD pair remained subdued, holding just above the 1.1000f figure. Speculative interest waiting for a catalyst.



Cable remains bearish below 1.2900 handle

GBP/USD is correcting below the 1.2882/1.2900 resistance zone and the 50/100 SMAs. Buyers would need to overcome this area on a daily basis in order to reclaim the 1.2950 resistance.


USD/JPY trims losses, rises back above 109.00

The USD/JPY pair trimmed losses over the last hours amid a recovery of the US dollar and despite the decline in equity prices in Wall Street.


Gold rebounds from multi-month lows, trades around $1,455

After posting its largest weekly percentage drop of the year and erasing more than $50, the troy ounce of the precious metal remained under pressure on Monday with the XAU/USD pair slumping to its lowest level since early August at $1,452.

Gold News

Central bankers link the future to blockchain projects

The race towards the tokenization of sovereign currencies has begun a long time ago, but it finally enjoying its time in the sun. China has announced its intention to create an e-Yuan, and also in Europe, institutions are considering the matter.

Read more