Manufacturing sales in Alberta increased 3.9 per cent to $6.5 billion in March, a pace of growth much higher than the Canadian average, according to data released on Thursday by Statistics Canada.
“The gain reflected higher sales of petroleum and coal products, which rose 15.9 per cent in March, following a 20.6 per cent increase in February. Higher volumes and prices contributed to the increase of petroleum and coal products,” said the federal agency.
On an annual basis, sales in Alberta were up 3.7 per cent.
Across Canada, manufacturing sales in March increased 2.1 per cent to $58 billion, following a 0.2 per cent decrease in February and a 0.9 per cent gain in January. The transportation equipment, petroleum and coal product, and primary metal industries posted the largest gains in March.
Overall, sales were up in 12 of 21 industries, representing 56.4 per cent of the Canadian manufacturing sector.
Year over year, sales rose by two per cent nationally.
“In the petroleum and coal product industry, sales rose for the third consecutive month, up 8.2 per cent to $6.2 billion. This reflected higher sales from refineries in both western and eastern Canada. In volume terms, sales rose 3.2 per cent in the petroleum and coal product industry in March,” said StatsCan.
Royce Mendes, an economist with CIBC Economics, in a commentary note, said factory activity came roaring back in March, posting its largest advance since early last year.
“Despite the strong rebound in the headline number, the increase was somewhat narrowly based, with gains coming in only 12 of 21 industries and being focused in transportation, petroleum and primary metals, all of which were rebounding from prior weakness. Still, today’s reading suggests a likely healthy advance in March monthly GDP, and will support the street’s view that growth will outperform the Bank of Canada’s pessimistic view for quarter one.”
Nathan Janzen, senior economist with RBC Economics Research, said the manufacturing numbers mean that overall economic growth probably returned at least modestly to the positive column in March after gross domestic product declined 0.1 per cent in February.
“Growth for quarter one as a whole still looks likely to be on the soft side – at a touch less than one per cent. We continue to expect a ‘rebound’ to a two per cent rate in quarter two as some of the transitory disruptions that plagued activity in quarter one (bad weather, Alberta oil and gas production curtailments) ease. Escalating U.S.-China trade tensions have added grey clouds to the outlook, though,” he said.
“The U.S. manufacturing sector has already shown signs of slowing in recent months – and part of that is likely due to increased U.S. import tariffs that have disproportionately impacted the industrial sector. That was, of course, before the implementation of the latest round of U.S. tariff escalation last Friday. Close integration of North American supply chains means that any negative impact to U.S. industry will also likely have spillovers to Canada. We continue to expect, at this point, that those spillovers will be manageable but uncertainty about global trade disruptions will continue to weigh on business investment decisions – and, alongside still benign inflation trends, will leave the Bank of Canada with plenty of reason for caution about considering any future interest rate hikes.”