Canada: May’s Manufacturing shipments should support GDP growth – NBF

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Data released today showed that Manufacturing shipments rose 1.6% in May and the unadjusted capacity utilization rate in Canada’s manufacturing sector increased to 2.4 percentage points to 82%. Kyle Dahms, analysts at the National Bank of Canada 

Key Quotes:

“Manufacturing sales in Canada came in slightly below consensus expectations in May. Truth be told, the headline number grew at a very decent clip in the month. A rebound in transportation equipment was always in the cards after temporary auto plant shutdowns in April.”

“It is important to note that volume sales and inventories were rising at a faster pace than their nominal counterparts. This will certainly help the growth outlook for May GDP.”

“Looking at quarterly data, following a 1.7% increase in the first quarter of the year, real shipments are on track to jump an annualized 7% in Q2 after two months of data, thanks to the excellent handoff from March and the strong May print. This is consistent with our view for Canada’s GDP growth accelerating in the second quarter of the year.”

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