Statistics Canada says manufacturing sales hit new record in January, up 2.3%

OTTAWA — Canada's manufacturing sector surged ahead in January to a new sales record, raising hopes economic growth will be better than expected to start the year.

Statistics Canada said Wednesday manufacturing sales rose 2.3 per cent in January to $53.1 billion, boosted by higher sales of motor vehicles, food and motor vehicle parts.

The result topped the 0.5 per cent gain that had been expected by economists, according to Thomson Reuters.

TD Bank economist Warren Kirkland called it a strong report, noting that excluding petroleum and coal products, manufacturing sales rose 3.1 per cent, month over month.

"We remain optimistic that much of these gains will be sustained in coming months as the past declines in the loonie and robust U.S. domestic demand continues to support Canadian shipments," Kirkland said in a note to clients.

"We expect that most of the upside remains to be seen across Ontario, Quebec and B.C., but other provinces should share in the spoils also."

However, Kirkland expected continued weakness in the oil-producing provinces, most notably Alberta and Saskatchewan.

Manufacturing sales rose in 16 of 21 industries, representing more than 80 per cent of the manufacturing sector. However, petroleum and coal products fell 5.9 per cent due to lower prices.

Statistics Canada said motor vehicle sales reached their highest level in 15 years as they gained 9.6 per cent to total $6.6 billion. The agency attributed the increase to a trend in the industry toward higher-end models and the lower value of the Canadian dollar.

Sales of food climbed 4.6 per cent in January to $8.4 billion, while the motor vehicle parts industry gained 4.0 per cent at $2.7 billion.

Eight provinces recorded higher sales in January, led by Ontario and Quebec. The only provinces to report lower sales were Alberta and Nova Scotia.

Craig Wong, The Canadian Press