OTTAWA – Canadian manufacturing sales beat expectations as they rose 3.1 per cent to $56.2 billion in January to top their pre-pandemic mark set in February 2020 for the first time.

Economists on average had expected an increase of 2.5 per cent for the month, according to financial data firm Refinitiv.

The result was the latest economic data point to come in better than expected, pointing to strength in the economy to start the year.

“January’s manufacturing sales print joins a list of other indicators pointing to a solid performance for the Canadian economy in early 2021,” TD Bank economist Omar Abdelrahman wrote in a note to clients.

“While we’re not out of the woods yet, the ramp up in vaccinations and the gradual removal of restrictions in Canada’s largest provinces suggest that decent performances are in the cards going forward.”

Last week, the Bank of Canada reversed its outlook for the economy and said it expected growth in the first quarter of the year instead of its earlier forecast for a contraction.

The change followed a stronger-than-expected end to last year and a preliminary estimate by Statistics Canada that the economy eked out a small gain in January despite strict public health restrictions.

Statistics Canada also said Friday that the economy added 259,000 jobs in February, outpacing the net gain of 75,000 jobs that had been expected.

The gain in manufacturing sales in January were powered by the wood product, computer and electronic product, and primary metal industries.

Sales of wood products rose 9.1 per cent to $4.1 billion in January, helped by higher prices and sales volumes.

Computer and electronic product sales climbed 22.4 per cent to $1.4 billion, while the primary metal industry saw sales rise 6.0 per cent to $4.2 billion.

Meanwhile, motor vehicle sales fell 8.2 per cent to $3.9 billion, the lowest level since May 2020, as a worldwide shortage of semiconductor chips affected the auto industry and halted production in many assembly plants in Ontario.

In constant dollars, manufacturing sales were up 1.1 per cent.

This report by The Canadian Press was first published March 15, 2021.