UPDATE 1-Canada May factory sales recover partially after April plunge

Tue Jul 16, 2013 8:36am EDT

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* Sales rise 0.7 percent, matching expectations

* Chemical industry posts biggest gain in dollar terms

OTTAWA, July 16 (Reuters) - Canadian factory sales in May rose by 0.7 percent from April, making up some of the ground they lost during a plunge the previous month, Statistics Canada said on Tuesday.

The advance - just the second in five months - matched analysts' predictions. Statscan revised April's initial 2.4 percent drop to 2.1 percent, which represents the worst month-on-month decline since August 2009.

Sales increased in 11 of 21 industries, representing about 57 percent of the manufacturing sector. Constant dollar sales rose by 0.7 percent on higher volumes.

The chemical industry posted the biggest sales gain in dollar terms on an unusually large increase in fertilizer sales. Wetter and colder weather delayed spring planting this year, which meant the annual increase in fertilizer production occurred later than usual, Statscan said.

Inventories edged down by 0.2 percent, the first decline after four months of gains, while the inventory-to-sales ratio slipped to 1.42 in May from 1.43 in April. The values for the ratio in April and May were the highest since late 2009.

Graphic - Canadian manufacturing sales:

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