Manufacturing shipments in July increased 5.5 per cent, well above the 2.5 per cent that analysts had been expecting, Statistics Canada said Wednesday.

Sales in the motor vehicle industry rose 48.2 per cent to $3.3 billion in July, Statistics Canada said. (Frank Gunn/Canadian Press)

Sales increased to $41.4 billion in the month. Although the July figure is above June's level, it is still 22.4 per cent below the $53.3 billion posted in the same month a year earlier.

Much of the increase was attributed to the car industry. When the output from that sector is stripped out, the increase is 2.1 per cent. Sales in the motor vehicle industry rose 48.2 per cent to $3.3 billion, as some assembly lines resumed production following extended shutdowns.

Despite the production increase, sales of passenger cars remained sluggish, down 22.6 per cent in July from levels during the same period last year.

The uptick in manufacturing is not surprising, RBC economist Paul Ferley said in an interview Wednesday with CBC News. "A lion's share of the strength came from a pickup in auto production, but we also saw good gains in primary metals production and aerospace."

In July, Chrysler and GM resumed production at Ontario plants after extended shutdowns.

"It was an encouraging report and, given the extent of the strength, it's pointing to the Canadian economy probably returning to positive growth in the third quarter," Ferley said.

Bombardier employees work on a CRJ200 jet at the company's plant in Montreal. Sales from the aerospace sector increased 5.5 per cent in July, Statistics Canada said Wednesday. (Ryan Remiorz/Canadian Press)

Aerospace products and parts — up 12.2 per cent — and plastics and rubber products — up nine per cent — also made important contributions to the overall manufacturing strength.

Sales increased in 15 of the 21 subsectors in the manufacturing space.

Petroleum and coal products — down 3.6 per cent — and food — down 1.3 per cent — posted the largest sales declines in July.

"Combined with housing starts, that's now two strong indications that real GDP growth posted a solid gain in July, although employment did fall," BMO economist Robert Kavcic said in a research note.