Rising production in Canada’s motor vehicle sector helped push sales of manufactured goods up by 1.6% in February, Statistics Canada said today.

Sales for the month topped out at $50.1 billion.

The February growth added to January’s rise of 1.3% as the manufacturing sector pulled back ground lost in a 3.7% drop in December.

StatsCan noted that despite increases in the first two months of 2008, manufacturing sales were still well off levels of one year ago. February’s sales were 2.3% below levels of the same month last year, and significantly below March 2007’s peak of $53.1 billion.

A higher Canadian dollar and an economic slowdown have combined to crimp shipments of Canadian manufactured goods to the country’s largest trading partner, the United States.

Following production slowdowns and shutdowns in December and January for re-tooling and inventory control, manufacturing sales of motor vehicles jumped 11.7% to $4.3 billion in February, following a January gain of 3.9% and a cut of 27.3% in December 2007.

Factoring out the transportation equipment sector, which includes motor vehicles and aerospace industries, manufacturing sales rose by 0.4% in February.

South of the border, higher costs for energy and food pushed consumer prices in the United States up by 0.3% in March, the U.S. Labour Department said today.

Core inflation, which excludes volatile factors such as food and energy, rose 0.2% last month.

Both the overall and core inflation rates for March were on par with the expectations of economists.

Year over year for March, prices were up by 4%, driven by a 17% gain in energy costs and a 4.4% increase in food costs.

Separately, U.S. housing starts decreased 12% to a seasonally adjusted 947,000 annual rate in March, after falling 0.7% in February to 1.075 million, the Commerce Department said today. Building permits also dropped in March.

Economists had expected a 6.1% drop to 1.000 million during March. The level of 947,000 was the lowest since 921,000 in March 1991.

Year-to-year, housing starts during March were 37% below the level of construction in March 2007.