Canadian Auto Rebound Lifts February Manufacturing, Wholesale Sales

Factory shipments rose 3.6% from the previous month to a seasonally adjusted C$71.19 billion (US$51.7 billion), slightly below Statistics Canada's flash forecast of 3.8%, but recovering from a 3.1% drop in January. Wholesale sales similarly recovered, advancing 2% to C$86.77 billion, also slightly below the 2.3% advance forecast, following a 1.1% decline in January.

In volume terms, factory sales were up 3.4% for the month, while wholesale trade volumes rose 1.1%. This data offers a positive signal for Canada's economy, which is expected to show sluggish growth this year, and supports the advance GDP growth estimate, as noted by Bradley Saunders, North American economist at Capital Economics.

However, the escalation of the Middle East conflict, spiking energy costs, and trade uncertainty related to the Canada, U.S., and Mexico agreement introduce headwinds. The Bank of Canada will update its economic projections later this month, considering how higher oil prices could boost export revenue but also restrain consumer spending and increase business costs.