MNI 5 THINGS:Cdn Mfg Sales Beat Expectations But Orders Weak>

--5 Things We Learned From the Canadian Monthly Manufacturing Survey

By Yali N'Diaye

     OTTAWA (MNI) - The following are the key points from the March data 

on Canadian manufacturing sales released Wednesday by Statistics Canada: 

     - Manufacturing sales rose a further 1.4% in March to a record 

C$57.1 billion, beating analysts' expectations in a MNI survey that had 

centered on a 1.2% gain. The surprise was reinforced by the upward 

revision to February's growth estimate to 2.7% from 1.9%. However, the 

overall details suggested activity in the sector was not as strong as 

the headline suggested. 

     - On the positive side, gains were widespread across sectors and 

regions, with 13 of 21 industries reporting higher sales, representing 

72% of manufacturing trade. Gains were led by primary metals (+4.2%) and 

aerospace and parts (+10.6%). The latter were boosted by the 

depreciation of the loonie. Aerospace and parts volumes were in fact up 

just 3.6%. Excluding aerospace and parts, sales rose 1.1% after 2.7% in 

February, with volumes up 0.5% after 2.3%. Sales excluding autos and 

parts rose 1.8% as auto shipments fell 2.0%. Regionally, sales were up 

in 7 provinces. 

     - However, sales volumes rose just 0.6% on the month, following a 

2.2% rise in February. Real sales expanded by 1.0% in the first quarter, 

the same pace as the fourth quarter, suggesting a positive contribution 

to GDP growth. Nominal sales rose 1.7% over the quarter, a slowdown from 

2.9% the previous quarter. Challenging the Bank of Canada's business 

investment recovery scenario, machinery sales contracted 1.7% on a 1.6% 

drop in volumes. 

     - In addition, forward looking indicators were not encouraging, 

with new orders down 0.7%, and 2.5% in volumes. While unfilled orders 

were up 1.5% on the month, they edged down 0.3% in volumes. 

     - Inventories rose 0.7% in March, bringing down the 

inventory-to-sales ratio to 1.39 from 1.40. 

--MNI Ottawa Bureau; email: yali.ndiaye@marketnews.com 

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