TD Securities economists expect Canadian Manufacturing Sales to rise 3.2% month-on-month in March, slightly below market consensus. They highlight higher gasoline prices and a 20% jump at the pump as key drivers, alongside stronger transportation products. However, real manufacturing sales are seen as muted due to higher industrial prices, implying only a mild tailwind for Canadian GDP.

Energy and autos drive nominal manufacturing gains

"We look for manufacturing sales to rise another 3.2% m/m in March, building on their 3.6% gain the prior month (market: +3.5%). Higher gasoline prices will provide the key driver with a 20% increase in the price at the pump which will translate to an outsized contribution from petroleum refineries in March."

"Transportation products will provide another tailwind on stronger auto production, while other components should see more modest gains, consistent with the smaller increase for non-energy exports in March."

"Real manufacturing sales should see a muted performance with the 2.4% m/m increase for industrial prices, which would translate to only a mild tailwind for industry-level GDP."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)