Canadian factory sales climbed for a second month in September, a surprise lift to an economy that was supposed to be losing steam in the second half of the year.
Statistics Canada said on Nov. 16 that manufacturing sales climbed 0.5%, lifted by a 10.3% jump in petroleum and coal.
Manufacturing is one of the industries to watch as the Bank of Canada decides how cautious to be about raising interest rates again after hikes in July and September. The latest report suggests factories are regaining momentum after declines in June and July that were more in line with the Bank's view the economy would slow in the second half of the year.
The industry still faces risks from a higher Canadian dollar that can curb foreign demand and changes to the North American Free Trade Agreement that could curb access to the U.S., Canada's biggest customer.
Factory sales in volume terms were strong with a 0.7% gain. The sales volume strips out price increases and is a better guide to future economic growth.
However, the overall gain in factory sales was narrow, with just seven of 21 subsectors reporting gains. Motor vehicle production fell by 5.9% in September, while factory inventories fell by 0.7%, the fourth straight decline.
The Ottawa-based agency in a separate report said international investors added a net C$16.8 billion of Canadian securities in September, the third straight gain.
The monthly increase in petroleum and coal production was the third straight, and over the past 12 months, they have climbed by 22.9%.
Sales in the province of Quebec rose 1.7% to a record C$13.3 billion, led by a 24.9% jump in petroleum and coal.
The international securities report showed that foreign purchases of Canadian bonds climbed to C$18.7 billion in September from C$8.1 billion in August. Global investors also bought C$4.1 billion of Canadian stocks, while their sale of C$6 billion of money-market paper was the largest since March 2014. Some investors shifted from shorter-term paper to bonds as interest rates climbed, Statistics Canada said
By Greg Quinn