OTTAWA - Manufacturing sales posted a small gain in September, boosted by the aerospace industry, even as the Canadian economy faced increased headwinds.
Statistics Canada said Thursday manufacturing sales rose 0.4 per cent in September to $49.8 billion, ahead of economists' expectations of a gain of 0.3 per cent.
"The gain reflected higher production in the aerospace product and parts industry and increased sales of primary metals," the agency said.
However, excluding the aerospace sector, which climbed 43 per cent to $1.8 billion, total manufacturing sales slipped 0.7 per cent due to declines in the motor vehicle assembly industry.
The overall gain for the month also came as the results for August were revised down to a gain of 0.9 per cent compared with an earlier report of 1.5 per cent.
"Over the past several months, the level of manufacturing sales volumes has trended higher, but less convincingly," David Madani of Capital Economics wrote in a report.
"The recent turndown in merchandise exports and the fact that U.S. industrial production and capital goods orders have slumped as well suggests that further gains in manufacturing volumes might be hard fought."
September sales rose in eight of 21 industries, representing just under half of all manufacturing.
Durable goods sales increased 1.1 per cent to $25.8 billion, while non-durable goods sales decreased 0.4 per cent to $24 billion.
Inventories increased 0.2 per cent to $65.2 billion in September, helped by the machinery and food industries, which gained 2.1 per cent and 1.7 per cent respectively.
Petroleum and coal product inventories were down 4.5 per cent, while computers and electronics were down 3.1 per cent. The aerospace industry slipped 1.9 per cent.
TD Bank economist Leslie Preston said September closes out "a disappointing quarter for the manufacturing sector" with sales essentially flat for the quarter as a whole.
"Unfortunately, a material improvement for the manufacturing outlook will likely have to wait until later next year," Preston wrote in a note.
"That is when we expect demand from south of the border to pick up more strongly. Once there is greater certainty about whether the U.S. faces a fiscal cliff, or a ditch, and business confidence improves, Canadian manufacturers should see a boost. However, they still face a Canadian dollar hovering around parity, which is likely to remain a headwind to growth."
Sales rose in three provinces.
The strength in the aerospace sector helped Quebec lead the way with 4.2 per cent growth in sales, while higher sales of durable goods boosted Manitoba by 3.7 per cent.
Alberta was the third province to show growth adding 1.9 per cent, helped by the energy sector.
In Ontario, sales fell 0.9 per cent to $23 billion due to lower sales in the motor vehicle assembly, fabricated metal product, motor vehicle parts, and primary metal industries.