Manufacturing sales rebound in June

Canadian manufacturing sales bounced back slightly more than expected in June after losing ground in May.

Statistics Canada said Tuesday manufacturing sales gained 0.8 per cent to $50.2 billion in June after losing 1.0 per cent in the prior month. Economists had expected a gain of 0.7 per cent, according to Thomson Reuters.

"After what has been a fairly dismal run, the June manufacturing data represents a welcome bright spot," TD Bank economist Brian DePratto said.

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"The forecasted second-quarter contraction is thus likely to be a blip. Many of the temporary setbacks that dragged Q2 lower have already reversed, setting the stage for relatively healthy growth and a resumption of the economic rotation process over the latter half of this year."

The increase in sales was due to higher purchases of machinery and transportation equipment products. On a constant dollar basis, overall sales gained 0.5 per cent, indicating a higher volume of goods sold.

The machinery industry gained 5.8 per cent at $2.7 billion, following five consecutive monthly declines, while the transportation equipment industry added 1.4 per cent to total $10.7 billion in June.

Inventory levels fell 0.2 per cent to $70.6 billion in June, the fifth consecutive monthly move lower, while unfilled orders climbed 1.6 per cent to $90.4 billion, a third consecutive monthly increase.

May was hurt by an earthquake in Japan that disrupted the auto sector, while the Alberta wildfires also hurt sales.

Feeling effects of wildfire

Statistics Canada said in June that 118 manufacturers, or about 3.2 per cent of those surveyed, reported being affected by the wildfire and evacuation of Fort McMurray, Alta. That was down from 194 in May.

Of those that reported an impact on their business in June, the agency said about 38 per cent were able to quantify the effects, with the majority reporting a loss of sales.

Statistics Canada said that because of the wildfire, national sales in the machinery and fabricated metal product industries in June were lower than they would have been.

Manufacturing sales in June were up in four provinces, led by Ontario.

Ontario rose 1.4 per cent to $24.7 billion in June, while Alberta gained 1.8 per cent to $5.2 billion. New Brunswick fell 4.1 per cent to $1.3 billion.