Canada: Manufacturing shipments data points to a strong contribution to GDP in Q3 - NBF

Manufacturing shipments rose 0.2% in September in Canada. According to National Bank of Canada analyst, Kyle Dahms, during the third quarter, real manufacturing shipments jumped 5.5%; combined with firms stockpiling, should be a good contribution to growth. 

Key Quotes:

“Canadian manufacturing shipments managed to edge in slightly above expectations in September. It is worth noting that the increase was not broad based as shown by the transportation equipment segment accounting for most of the rise. Specifically, manufacturing sales for motor vehicles/parts surged following plant maintenance in July-August.”

“The headline print was also supported by higher prices for chemicals and petroleum/coal products in the month. On the flip side, the machinery segment saw the largest one month decline in over 6 years while wood products fell for a fourth consecutive month on the back of lower demand and prices.”

“Looking at the quarterly perspective, after having expanded 0.8% annualized in Q2, real manufacturing shipments jumped 5.5% in annualized terms in the third quarter. This was the fastest clip in over a year and prolongs the longest streak of uninterrupted quarterly growth since data collection began in 2002 (11 quarters). This combined with firms stockpiling (as shown by inventories rising at a 5.5% annualized pace) should translate into a strong contribution to growth from this sector in Q3.”