By Robb M. Stewart
OTTAWA–Canadian factory sales increased for a third month running in September, buoyed by a rise in prices for refined petroleum products.
Manufacturing shipments rose 0.4% from the previous month to a seasonally adjusted 72.79 billion Canadian dollars, the equivalent of about $53.16 billion, Statistics Canada said Wednesday.
The result was stronger than the data agency’s advance estimate for a decline of 0.1% for the month, following an upwardly revised increase of 1.0% in August.
The unexpected rise was driven in large part by sales of petroleum and coal. Stripping that segment out, manufacturing sales for the month fell 0.4%.
On a quarterly basis, the advance in September helped lift sales 1.3% for the third quarter, mainly on higher sales of petroleum and coal and food products, following a 1.6% drop in manufacturing sales in the second quarter of the year.
Much of the increase for the latest month was driven by higher prices. Sales on a price-adjusted, or constant dollar, basis declined 0.6% to C$55.86 billion in September, indicating a lower volume of goods sold and consistent with a headwind to industry-level gross domestic product for the month.
Sales of petroleum and coal products rose 6.3% in September to C$9.14 billion, the highest level since January, due mainly to higher refined petroleum prices after Saudi Arabia and Russia announced they had extended a voluntary oil production cut through the end of the year, the data agency said.
On a quarterly basis, petroleum and coal sales climbed 8.5% following declines the prior two quarters.
Wood product sales increased 2.9% for the month, a fourth consecutive monthly gain, while sales of chemicals fell 1.8%, amid maintenance shutdowns at some major petrochemical and resin plants in Alberta and Ontario.
Motor vehicle sales were up 0.7% from the month before, while vehicle parts sales dropped 2.6%. Excluding motor vehicles, parts and accessories, overall manufacturing sales rose 0.5% in September.
Inventory levels held by factories increased 1.5% in September, with widespread gains led by the petroleum and coal segment, primary metal and beverage and tobacco, the agency said. Unfilled orders, the stock of orders that will contribute to future sales if they aren’t canceled, were down 1.2% for the latest month and new orders were 1.7% lower.
The pace of Canada’s economic activity has slowed in recent months under the weight of higher interest rates, with early data pointing to another month of little change in industry-level gross domestic product in September after output was essentially unchanged month-over-month in July and August. The Bank of Canada has projected economic growth will remain weak for the next year.
The country’s manufacturing sector remained in contraction territory for a sixth consecutive month in October, with S&P Global’s monthly purchasing managers index coming in at 48.6 for the month as output and orders both fell and companies continued to reduce purchasing and stock levels.
Write to Robb M. Stewart at [email protected]
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