Canada manufacturing sales for January 0.2% versus 0.4% estimate

• Prior month -1.1% revised from -0.7% initially reported
• Manufacturing sales increased by 0.2% to $71.1 billion in January. The estimate was for a 0.4% gain
• Sales rose in 11 of the 21 subsectors, with transportation equipment (+4.3%) and chemicals (+3.5%) leading the gains.
• The aerospace product and parts industry group saw the largest decline at -16.7%.
• Sales in constant dollars rose by 1.1% in January.
• The Industrial Product Price Index decreased slightly by 0.1%.

Inventories decreased by 0.2%:

• Total inventories decreased by 0.2% to $122.1 billion in January, following a 1.4% drop in December.
• The decrease was primarily due to lower raw material inventories, which fell by 1.2%.
• Significant declines in inventories were seen in primary metals (-4.2%) and petroleum and coal (-4.5%).
• The inventory-to-sales ratio remained unchanged at 1.72 in January, indicating the time required to exhaust inventories if sales continued at the current level.

Capacity utilization rises in the month:

• The capacity utilization rate for the total manufacturing sector rose from 75.1% in December to 77.1% in January, mainly due to increased production.
• Significant increases were seen in the chemical (+7.5 percentage points) and transportation equipment (+3.7 percentage points) subsectors.
• These gains were partially offset by declines in the non-metallic mineral (-7.1 percentage points) and computer and electronic product (-6.1 percentage points) subsectors.

This article was written by Greg Michalowski at www.forexlive.com.