Written by Katie Davis S hipments of motor vehicles, auto parts, food and beverages were the driving force behind Statis- tics Canada reporting the highest increase in manufacturing sales on record in January. As per data released by Statistics Canada, Canadian factories sold $53.1 billion worth of goods in January, which is an increase of 2.3 percent from the previous month’s level.
Sales of automotive parts continued to show growth for the fifth con- secutive month increasing by 4 percent to $2.7 billion, which puts Canadian auto part sales at their highest level since 2006. Statistics Canada also states that a shift to higher-value vehicle pro- duction had made a difference in the dollar value of Canadian auto production, while the low Canadian dollar had helped exports.
As we look regionally, eight provinces recorded higher sales in January
Food sales also increased, this is partly related to the lower Canadian dollar pushing up wholesale costs. Food sales are normally fairly steady regardless of the economy but they rose 4.6 percent in January to $8.4 billion, the highest value ever recorded. Kirkland also states that, “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.” As we look regionally, eight provinces recorded higher sales in January, led by Ontario and Quebec. British Columbia, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island, Newfoundland and Labrador all saw slightly smaller increases. The only provinces to record declines were Alberta and Nova Scotia.
Automotive sales increased 9.6 percent in January to $6.6 billion, the highest level since November 2000. Statistic Canada attributes the increase was due to two things, increased sales of higher-end expensive cars and the plunging value of the loonie (Canadian Dollar). However not all this increase can be explained by the weaker loonie making things appear to be more expensive. TD Bank economist Warren Kirkland states, “The volume of goods sold is returning to their pre-recession highs,” and that Canadian facto- ries simply produced and sold more products in January.
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APRIL 2016 • SPOTLIGHT ON BUSINESS
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