With two big reports, labour force and merchandise trade, out of the way on Friday, the economic calendar for this week in Canada is sparse. The focus will be on the U.S., where a slew of data, including retail sales, will keep markets busy.

For Canada, the key report will be manufacturing shipments for January, due on Tuesday. The consensus forecast is for an increase of 0.4%, which would undo the 0.2% decline in December.

CIBC World Markets Inc. is slightly less bullish, calling for a gain of 0.2% for January, which would be consistent with a tepid GDP growth in the first quarter. “Markets are unlikely to be too surprised by soft manufacturing, given talk of C$ drag and the poor real export performance of late,” says CIBC economist Warren Lovely.

Also out this week in Canada are motor vehicle sales for January, due out Monday morning — CIBC is calling for a slight decline — and international securities transactions on Thursday.

Any real economic excitement should come from south of the border. There, February retail sales and business inventories come out on Tuesday followed by February industrial production and housing starts on Wednesday along with the fourth-quarter 2004 current account balance.

There is also a closely watched consumer sentiment survey on Friday, and Federal Reserve Board Chairman Alan Greenspan will be heard from twice, on Tuesday and Friday, although few expect any major pronouncements ahead of the March 22 FOMC meeting.

Retail sales are expected to be up by at least 0.7%, offsetting the 0.3% drop in January. CIBC is again more bullish, calling for a jump of 0.9% for the overall figure and a 1% hike when excluding auto sales.

“Job growth gathered speed in February and it seems Americans took their new paychecks and income tax refunds straight to the malls,” says CIBC’s Leslie Preston. “We expect a healthy 1.0% jump in non-auto retailing in February, improving the yearly trend. Even beleaguered auto retailers managed to eek out a slight gain in unit terms in February, so we don’t expect autos to detract too much from total sales. “

Housing starts for February are expected to give back much of the prior month’s impressive gain (annual rate of 2.16 million), but should still come in at between 2.02 million and a brisk 2.07 million. The U.S. housing sector has shown resilience in the face of 150 basis-point tightening by the Fed is impressive.

Industrial production for February, also due Wednesday should show an increase of between 0.3% and 0.4%, marking the fifth straight month of increases. “Healthy manufacturing activity should continue to drive industrial production higher in February,” says Preston. “After a big drop in January, utilities also look set to contribute to the advance.”