Nathan Janzen, the senior economist at Royal Bank of Canada (RBC), notes that Canada’s manufacturing sales rose 1.6% in May, and the increase extends a recent string of Canadian manufacturing outperformance relative to the U.S.

• “The increase in manufacturing sales in May was, as expected, largely concentrated in the transportation sector.  Still, sales edged up 0.2% excluding transportation components, and have yet to decline on that basis in any month of this year.
• To be sure, growth in the Canadian manufacturing sector has not exactly been spectacular – but sales volumes (i.e. excluding price impacts) were still up 3.5% from a year ago in May and 2.0% year-to-date in 2019.
• For now, though, the domestic economic data continues to look a little better. And, with inflation also holding around 2%, is another reason the Bank of Canada won’t likely need to rush to follow the US Fed with a widely expected rate cut later this month.”