Manufacturing sales increased in November, surpassing analysts estimates, according to Statistics Canada numbers released today.

The main catalyst for the 1.1% rise for the month was fossil fuel price increases.

New orders rebounded during the month, jumping 8.1% to $53.2 billion and slowing the downward trend seen throughout most of 2007. Despite the jump in November, new order levels have been trending lower after peaking at $56.2 billion in January 2007, with decreases in 7 of the past 10 months.

Total sales improved by $573 million to $50.6 billion in October. But taking petroleum and coal product manufacturers out of the mix, manufacturing sales increased the more modest 0.3% that analysts predicted had predicted for November.

Petroleum and coal product manufacturers reported the most significant jump in sales, with increases of 7.7% or $424 million in November. However, the majority of the increase in sales can be accounted for by a 7.3% jump in petroleum and coal product prices during the month.

Despite November gains, BMO senior economist Kenrick Jordan says Canadian manufacturers are not yet out of the woods. “The headwinds of the strong loonie and demand weakness south of the border are blowing strongly and will continue to challenge Canadian manufacturers in the period ahead,” he wrote in a note.

Overall, just 11 out of 21 manufacturing industries increased their sales in November. This includes the primary metal industry, which increased sales 2.3%, despite prices falling by 1.1%, as well as motor vehicle manufacturing, which saw a 2% boost.

Provincially, things were generally positive in November, as seven provinces posted increases. Solid sales were seen across the western and central provinces, while weakness was limited to the coasts.

Ontario saw 1.4% gains, while Quebec’s sales rose 1.1%—both increases primarily hinged on strong sales of petroleum and coal products.

Inventory levels went up for the first time since July. Manufacturers reported total inventory level increases of 0.5% in November. Again, petroleum and coal products were the key contributors to these rising levels.

The inventory-to-sales ratio, which measures the time required to exhaust inventories if sales remain constant, stood still at 1.30 in November

The finished-product inventory-to-sales ratio also held steady, remaining at 0.44 in November.

“The November numbers do little to alter the landscape heading into next week’s Bank of Canada meeting, at which time we expect the Bank to cut the overnight rate by 25 basis points,” wrote RBC Economics senior economist Dawn Desjardins, in a note.