Highlights:
- Manufacturing sales jumped 3.4% in November, and 2.5% controlling for the impact of price gains.
- Motor vehicle sales bounced back after transitory disruptions in earlier months and chemical sales increased sharply in November.
- The jump in manufacturing sale volumes suggests overall GDP may have bounced back 0.3% in November after an unexpectedly soft flat reading in October.
Our Take:
Nominal sales jumped 3.4% in November – the fastest one-month gain since March 2015 – after falling 0.6% in October. About a percent of that increase was due to higher prices, largely a 6% jump in petroleum prices. Volume sales were still up 2.5%, though, led by a 14.7% (12.9% in nominal terms) bounce-back in manufacturer motor vehicle sales following transitory production disruptions in earlier months. Chemical sale volumes also bounced back, rising 5.0% after a 3.7% drop in October. Machinery sale volumes dipped lower for a second straight month but were still up 14% from a year ago. NAFTA uncertainty remains a risk to the outlook, particularly for manufacturers, but the still-strong level of domestic manufacturer machinery sales coupled with an earlier-reported surge in equipment imports in November suggest that Canadian businesses continued to increase investment in Q4. The outsized pace of overall GDP growth from mid-2016 to mid-2017 was never likely to be sustained for a long period of time. Today’s data adds to the list of indicators – not least of which is the solid labour market data – suggesting that although growth has slowed somewhat, the economy remains on a firm footing.
