By Robb M. Stewart

OTTAWA--Canadian factory sales strengthened in February, recovering from weakness the past couple months thanks to an increase in sales of petroleum and coal products.

Manufacturing shipments rose 0.7% from the previous month to a seasonally adjusted 71.61 billion Canadian dollars, the equivalent of about $51.98 billion, Statistics Canada said Monday.

The result was in line with the data agency's advance estimate and comes after sales were little changed the month before.

Sales in volume terms edged up 0.1% for the month to C$55.91 billion, an indication higher prices helped lift overall shipments in February.

Factory inventories fell for a third month running.

Canada's manufacturing sector struggled for much of last year, though activity has shown signs of recovery in recent months. S&P Global's Canada manufacturing purchasing managers' index has been in contraction territory for 11 consecutive months, though the decline softened again in March to a reading of 49.8 from 49.7 the previous month thanks to marginal declines in output and new orders, and an improvement in confidence among manufacturers.

After stalling in the second half of last year, Canada's economy has picked up even as labor market conditions have continued to ease and inflation has steadily cooled. The Bank of Canada, which last week again held its policy interest rate steady at a more than two-decade high, has projected GDP growth of roughly 2% on average in the first half of the year.

Wholesale trade was flat in February, with sales unchanged from the month before at C$82.18 billion, data from Statistics Canada showed. In volume terms, wholesale sales ticked up 0.2% from the month before.

The agency's manufacturing survey noted increased sales in 13 of the 21 segments tracked.

Sales of petroleum and coal rose 4.3%, thanks in part to increased prices for crude oil, the key input for refined petroleum products. Still, despite the monthly rise, sales of petroleum and coal products were down 1.5% on a yearly basis.

Electrical equipment, appliance and component sales were also up sharply, rising 12.6% from January to the highest on record.

Sales of transportation equipment increased for the month, and motor vehicle sales were up 0.6%. Stripping out vehicles, parts and accessories, overall sales for February increased 0.8%.

Chemical product sales pulled back following January's increase, mainly due to lower sales of pesticide, fertilizer and other agricultural chemical products.

Inventory levels held by factories were down 0.7% in February, with declines in chemicals, petroleum and coal products contributing most to the monthly fall, the agency said.

Unfilled orders, the stock of orders that will contribute to future sales if they aren't canceled, rose 0.8% for the latest month, mainly thanks to an increase in unfilled orders of aerospace products and parts. New orders were up 1.9%.

Write to Robb M. Stewart at

(END) Dow Jones Newswires

04-15-24 0848ET