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: risk aversion could send it sub-1.1180

EUR/USD capped by a critical Fibonacci resistance for two weeks in-a-row. The American dollar has closed the week on a high note as hopes for significant rate cuts faded.


GBP/USD: bears to retake control on a break below 1.2475

Renewed demand for the greenback has resulted in the GBP/USD pair giving back half of its Thursday’s gains at the end of the week, with the pair closing it just above the 1.2500 figure.


USD/JPY: bearish case firmer once below 107.20

The USD/JPY pair flirted with the 108.00 level by the end of the week on renewed demand for the greenback but retreated sharply from the level to settle at around 107.70.


Gold consolidates around $ 1440, eyes US data for fresh direction

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region.

Gold News

Something has spooked the Fed

We wish we knew what it is. Wild talk of the US joining Japan and Europe with zero or negative return on the 10-year is or should be very frightening.

Read more