Statistics Canada reported that Canadian manufacturing numbers rose 1% in July.

RBC Financial Group economists note that the rise follows declines in both May and June, and shipments are now at their highest level since April. Stats Can said that 14 out of 21 industries reported higher shipments, led by the motor vehicle sector, which rose 5.4%. Shipments in the petroleum and coal products industry were also strong.

Manufacturers also increased inventories for the third time in four months, up 0.6% to a five-month high of $62.1 billion. RBC says that this is a signal of confidence in the economy.

BMO Nesbitt Burns notes that new orders unexpectedly fell in July by 0.5% and 1.8%, excluding the auto sector. Unfilled orders also declined for the first time in three months.

“Canadian manufacturing has pulled out of its temporary lull, but concerns remain,” concludes BMO. “The weak new orders data and the still-struggling U.S. economy are cause for some concern. Still Canadian factories continue to add to payrolls with abandon.”

RBC says, “This report shows that Canadian manufacturers are in relatively better shape than their U.S. counterparts and clearly supports the view that the Bank of Canada will resume its tightening bias in the fall.”