04/16/2013 08:39 EDT | Updated 06/16/2013 05:12 EDT

Manufacturing sales up 2.6 per cent in February, biggest gain since July 2011

OTTAWA - Canada's manufacturing sector did better than expected in February, with auto sales leading a broad-based advance that was the strongest in 19 months.

Statistics Canada reported that manufacturing sales rose 2.6 per cent to $49.6 billion in February, the largest increase since July 2011.

The gain was broad based, as sales rose in 14 of 21 industries, representing approximately 85 per cent of the manufacturing sector, the agency said

Transportation equipment was the biggest factor, with other contributions from petroleum and coal products, food and miscellaneous manufacturing.

CIBC World Markets economist Emanuella Enenajor says manufacturing growth in February was nearly four times more than the consensus estimate.

"Sales of autos led the charge, with auto shipments up a searing 13.5 per cent. Coal product shipments were also up, although prices drove gains there," Enenajor wrote.

Constant dollar manufacturing sales increased 2.5 per cent, indicating that most of the gain reflected higher sales volumes.

Enenajor said the big gain in volumes probably came from additional production rather than inventory, a potential "big plus" for Canada's gross domestic product in February.

Sales of durable goods were up 3.7 per cent to $25.1 billion, while non-durable goods sales rose 1.5 per cent to $24.5 billion.

Sales rose in eight provinces in February, led by Ontario, Quebec and New Brunswick.

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