OTTAWA – Canadian manufacturing sales increased one per cent in October to $50.1 billion, hitting their highest level since May 2012, Statistics Canada said Tuesday.
The gain topped economists’s expectations for a drop of 0.3 per cent.
“Stronger growth in the U.S. was likely the driving force behind October’s monthly gain and will continue to be so as a more sustained pace of growth takes hold in 2014,” TD Bank senior economist Francis Fong said.
“In other words, we anticipate both the manufacturing and export sectors to be larger contributors to growth than they have been up to this point in the recovery. “
Fong noted the Canadian dollar has slipped about four cents against the U.S. dollar over the last two months, a move that should provide an additional boost.
“This pullback is expected to intensify further when the U.S. Federal Reserve begins tapering its quantitative easing program early next year,” Fong said.
The October increase in manufacturing sales was mostly due to higher sales in the food industry.
Food industry sales rose 6.9 per cent to $7.7 billion, while chemical sales increased 2.8 per cent to $4.1 billion in October.
Sales in the transportation equipment industry sales fell 1.7 per cent to $8.8 billion, partly offsetting the overall gain in total manufacturing sales.
Sales were up in 13 of 21 industries, representing 49 per cent of the manufacturing sector.
Non-durable goods sales advanced 2.6 per cent while durable goods sales declined 0.5 per cent.
Sales were up in seven provinces in October, with Quebec leading the way.