UPDATE 2-Canada Dec factory sales raise hopes of strong Q4

* December factory sales rise to year-earlier levels

* Aerospace, autos and energy showed strongest gains

* Sales seen as another sign of strong Q4 growth
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By Louise Egan

OTTAWA, Feb 16 (BestGrowthStock) – Strong demand in the aerospace,
autos and energy industries drove Canadian manufacturing sales
to a one-year high in December, Statistics Canada said on
Tuesday, in new evidence an economic recovery is taking hold.

Factory sales in December were 1.6 percent higher than in
November, growing slightly less than expected but still
providing good news for those hoping for robust fourth-quarter
economic growth.

“The report revealed more signs of a broadening economic
recovery in Canada,” said Jonathan Basile, vice-president of
economics at Credit Suisse.

The Canadian dollar strengthened against the U.S. dollar
after the report but analysts said investors were focused on
news of European debt problems and that the move was not likely
driven by Canadian economic events.

The aerospace industry soared back in December with a 28
percent jump following a 17 percent drop in the previous month.
But sales were also strong outside the volatile aerospace
sector, with 11 of the 21 industries reporting gains and sales
volumes gaining 2 percent.

Motor vehicle sales rose 4.4 percent in the month and the
petroleum and coal products industry climbed 2.4 percent.
Excluding autos, sales advanced 1.4 percent.

Upbeat data for December is spurring analysts to forecast a
big bounce-back in economic growth in the fourth quarter after
the economy barely crawled out of a deep recession in the third
quarter with disappointing 0.4 percent annualized growth.

“The data out on the Canadian economy thus far for the
month of December is suggesting that the economy is finishing
off the year on a high note after having struggled with the
concept of economic recovery during the summer months,” said
Stewart Hall, markets strategist at HSBC Canada.

The Bank of Canada sees the economy expanding by a healthy
3.3 percent in the fourth quarter but some private sector
economists peg growth as high as 4 percent.

Manufacturers’ inventory-to-sales ratio, at 1.37 in
December, began to resemble pre-crisis levels, and inventories
shrank 1 percent to bring them 11 percent below year-earlier

New orders increased 7.4 percent on the strength of the
transportation industry, while the backlog of unfilled orders
grew 2.3 percent.

Investing Research

($1=$1.04 Canadian)
(Reporting by Louise Egan; editing by Peter Galloway)

UPDATE 2-Canada Dec factory sales raise hopes of strong Q4