OTTAWA -- Canadian manufacturing sales edged up 0.2 per cent in September to $58.5 billion, led by gains in the transportation equipment industry, Statistics Canada said Friday.
Economists had expected an increase of 0.3 per cent for September, according to Thomson Reuters Eikon.
The growth compared with a drop of 0.5 per cent in August. However, Stephen Brown, senior Canada economist at Capital Economics, said that after taking into account an increase in prices, sales volumes in September were down 0.1 per cent.
He said that despite signs of weakness in August and September, a growth in July "means that the manufacturing sector had a good third quarter.
"September's rise in manufacturing sales capped off a strong quarter, but sales fell in volumes terms and the breakdown was hardly encouraging," Brown wrote in a report.
He noted the outlook seemed softer.
"Although unfilled orders rose by 0.4 per cent in September, new orders declined by 0.3 per cent. The inventories-to-sales ratio remains fairly elevated, suggesting that firms may eventually use those inventories up rather than increasing production," he said.
Manufacturing sales in September were up in eight of the 21 industries tracked boosted by a ramp up in production following auto assembly plant shutdowns in July and August that helped the transportation equipment sector increase 3.1 per cent.
Sales in the chemical sector gained 1.4 per cent, while the petroleum and coal product sector rose 0.9 per cent.
Meanwhile, sales in the machinery industry fell 6.2 per cent, while wood product sales dropped 2.9 per cent.
Manufacturing sales in September were up in six provinces, led by Ontario and Newfoundland and Labrador.
Ontario rose 0.6 per cent in September to $26.7 billion, while Newfoundland and Labrador climbed 21.0 per cent to $648 million.
New Brunswick and Manitoba posted the largest sales decreases in dollar terms in September.
New Brunswick sales fell 9.3 per cent to $1.5 billion, while Manitoba dropped 8.8 per cent to $1.6 billion.