By Kelsey Johnson
OTTAWA (Reuters) - Canadian manufacturing sales rose by a record 20.7% in June as many factories operated at a much higher capacity than in May, though total sales were still well below pre-pandemic levels, Statistics Canada said on Friday.
It was the second month of record gains as Canada's manufacturing sector continued to dig out from deep declines in April amid coronavirus shutdowns. The gain beat analyst expectations of 16.4%.
Statistics Canada also revised May's gain up to 11.6% from 10.7%.
Sales were up in all 21 industries monitored by Statistics Canada, led by the motor vehicle and parts industries as most plants returned to full production, StatsCan said. Excluding those two industries, manufacturing sales were still up 10.3%.
In volume terms, manufacturing sales rose by 18.4%.
But sales still remain 13.2% below pre-pandemic levels and were down a record 22.8% for the second quarter, dragged down by April's plunge.
And the recovery will likely be more gradual going forward, particularly if the recovery in the United States, Canada's largest trading partner, stalls amid rising COVID-19 cases, said Andrew Grantham, a senior economist at CIBC Capital Markets.
That "could dampen a key source of demand for many Canadian manufacturers," he said in a note.
The loonie was trading 0.1% lower at 1.3234 to the greenback, or 75.56 U.S. cents, but holding on to much of this week's gains.
(Reporting by Kelsey Johnson in Ottawa; Additional reporting by David Lunggren in Ottawa and Fergal Smith in Toronto; Writing by Julie Gordon; Editing by Toby Chopra and Jonathan Oatis)