- Manufacturing sales up 10.7% in May
- Sale volumes still down almost 30% from a year ago – but recovery likely continued in June
The 10.7% jump in manufacturing sales still only retraced about a fifth of the drop in sales over March and April. Excluding price impacts, sale volumes were up almost 9% in May but still down almost 30% from a year ago. Indeed, it is not so impressive that sales grew in May given the exceptionally low bar set the prior month. The number of new motor vehicles produced in April fell to zero, for example, as factories closed. With gradual re-opening, motor vehicle and parts sales from manufacturers jumped by ~$1.4 billion, but were still down 79% from last year. Sales of machinery actually declined further in May due to still-low demand.
Still, the increase in sales in May – while modest given the scale of the earlier downturn – was a little better than the 6.2% advance estimate from Statistics Canada a month ago. And early reports for June (improvements in the Canada manufacturing PMI and a jump in manufacturing hours worked, for example) have been a little more positive. The resurgence of virus spread in the US has been a reminder that there are limits to the extent the economy can bounce back to a ‘new normal’ before there is a more effective treatment or vaccine widely available. But in the near-term, the economic data continues to look a little better than expected.
