Factory sales rose 1.7 percent, exceeding economists’ expectations for a gain of 1.0 percent. June sales rose 1.5% versus the original estimate of a 1.2% gain, the agency added.
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But it warns U.S. growth could be thrown off by instability in its markets around the world and points to lacklustre business investment as a sign.
The revised estimate by the OECD brings the organization in line with the most recent forecast by the Bank of Canada for 2015.
It projects that the U.S. will grow by 2.4 per cent this year and by 2.6 per cent in 2016, a strong outlook that includes a resurgent consumer and improving employment picture.
The OECD has lowered its estimate for Canada’s economic growth this year to 1.1 per cent – revised downward from its June estimate of 1.5 per cent – as global growth stagnates.
The momentum in manufacturing, together with similarly encouraging June and July trade numbers, have fuelled optimism that the country’s export-intensive manufacturers have shaken off the cobwebs of the first few months of the year and are finally taking their long-awaited lead in Canada’s on-again, off-again economic recovery.
The downgrade came as the OECD cut its estimate for economic growth around the world to 3.0 per cent this year, down from 3.1 per cent. For next year, world economic growth is pegged at 3.6 per cent, down 0.2 per cent from the June estimate. July’s advance was largely due to higher volumes, as sales in real terms were up 1.1%.
“Higher sales of motor vehicle parts and motor vehicles were responsible for almost two-thirds of the national increase in July”. This year the auto makers took less downtime than usual, meaning the statistical adjustment overstated the seasonal effects. New orders, which act as an indicator of future activity, rose by a hefty 10.2%, which the data agency said reflected a gain in the aerospace sector.
Going forward, the outlook for the manufacturing sector remains quite bright.
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More broadly, increasing strength in the U.S. economy, combined with a further depreciation of the loonie to 73 US cents, should translate into increased demand for Canadian-made goods.
