OTTAWA Canadian factory sales rose in February to the highest level since before the last recession on gains in transportation and energy, while unfilled and new orders posted their biggest advances since at least 1992.

Sales rose 1.4 per cent to $51.2 billion, the most since July 2008's $53.3 billion, Statistics Canada said Tuesday in Ottawa. Economists forecast a 1-per-cent increase according to the median of a Bloomberg survey with 15 responses.

The gain ends a two-year period of stagnation during which inconsistent global demand and an exchange rate that held close to parity with the U.S. dollar hobbled shipments. Those factors have now turned to favour Canada, economists said.

"What is contributing to the underlying improvement is strength in the U.S. and the weaker Canadian dollar," said Nathan Janzen, an economist at Royal Bank of Canada in Toronto, the most accurate forecaster of sales in Bloomberg surveys. Sales "took a long time to get back to its peak."

Canada's dollar has fallen 5.6 per cent in the last six months. The currency declined as investors focused on Wednesday's Bank of Canada announcement, where Governor Stephen Poloz may reiterate he is "neutral" on the next move to his 1-per-cent policy interest rate.

Sales of transportation gear such as aircraft and cars rose 4.3 per cent to $8.93 billion in February. Higher prices for petroleum and coal products led a 2.9-per-cent rise in that category to $7.53 billion, the highest in almost two years.

Manufacturing sales excluding price changes, a better indicator of the industry's contribution to economic growth, rose 0.8 per cent in February. On that basis, sales are 8.2 per cent below their July 2008 peak.

The transportation category drove both the 16.5-per-cent jump in unfilled orders to $91.6 billion and an 18.8-per-cent gain in new orders to $64.2 billion, Statistics Canada said. Both increases were the largest in records dating to 1992.

Montreal-based Bombardier Inc. said in February it had 201 firm orders for the CSeries jet it is developing, which would contribute $5 billion to $8 billion a year in revenue.

Inventories rose 1.1 per cent to $72.3 billion in February, and the ratio of factory stockpiles to sales decreased to 1.41 from 1.42.

Statistics Canada reduced its estimate of January's sales gain to 0.8 per cent from 1.5 per cent, and pared the December decline to 0.6 per cent from 1.5 per cent.

The harsh winter in Canada and the U.S. slowed shipments and "embellished" the February gain that may be followed by another disruption from a strike at Vancouver's port in March, said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto.

"We are reticent to put too much stock in the overall health of manufacturers heading into the second quarter though we expect this industry to benefit from a more robust U.S. economy and a persistently soft Canadian dollar," Issa wrote in a client note.