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He said December machinery sales amounted to $340 million, down from $769 million in December 2014.

StatsCan said Canadian manufacturing sales for all of 2015 fell 1.5 per cent to $610 billion, mainly due to a 29 per cent drop in petroleum and coal products. It was the sector’s first annual decrease since it contracted in 2008 and 2009 during a recession.

TD Bank economist Dina Ignjatovic noted the manufacturing sector started 2016 with some momentum.

“The low loonie and healthy demand south of the border will play a key role in propping up Canadian manufacturing,” Ignjatovic wrote in a note to clients.

“Indeed, the relationship between the exchange rate and the top performing manufacturing sectors tends to be lagged — by up to six quarters — suggesting that the biggest impact of the recent depreciation in the loonie has yet to be felt. As such, there is still significant upside for currency-sensitive sectors.”

The dollar has bounced back from the lows it hit in January; however, it still remains well off the levels it has been in recent years.

The drop last year followed a move by the Bank of Canada to cut its key interest rate twice amid growing weakness in the economy.

Canada fell into recession in the first half of last year as the GDP contracted for the first two quarters of 2015, hit hard by the drop in oil prices.

Growth picked up in the third quarter, but economists have raised concerns about the last quarter of the year.

The national 1.2 per cent increase in December over November was led by growing sales for the motor vehicle and wood products industries.