(Bloomberg) --
Canadian factory sales recorded a stronger-than-expected rebound in May, adding to signs of improvinghealth for the nation's manufacturers.
The value of factory sales rose 1.4 percent, more thanmaking up a 1.1 percent decline the previous month, StatisticsCanada reported Tuesday from Ottawa. The May increase came asgains in machinery helped make up for a sharp decline in autoproduction during the month. Economists had been anticipating a0.4 percent gain for May according to a Bloomberg survey.
The recovery highlights how manufacturing is benefitingfrom a robust U.S. economic expansion and a weaker Canadiandollar, and the gains should reinforce expectations thatfactories will continue to provide a bigger contribution togrowth than they have for much of the past decade --particularly as consumer spending slows.
Sales in May rose in 14 of 21 industries, representing 64percent of the total. Excluding autos, sales were up 2.6percent, the fastest since 2011. The gain was driven by an 8.9percent gain in machinery sales. In volume terms, total saleswere up 0.9 percent.
The strong increase in other sectors masked a sharp drop inmotor vehicle shipments, down 6.6 percent. In previous reports,Statistics Canada said there were supply disruptions in thesector during the month.
Other indicators show the outlook for shipments remainspositive. New orders were up 4.9 percent in May, and are 11.9percent above year ago levels.
With this release, Statistics Canada also begun publishingmonthly capacity utilization rates for manufacturing. Unadjustedcapacity utilization increased to 81.9 percent in May, from 80.6percent in April, the statistics agency said.
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