UPDATE 1-Food and cars boost Canada March factory sales

* Sales beat Reuters forecast of 1.0 pct gain

* Food and autos the biggest gainers

* New and unfilled orders, inventories drop

Defense News: OTTAWA, May 14 (Reuters) - Canadian manufacturing sales beat expectations in March to grow 1.2 percent from February on strong gains in the food and auto sectors, Statistics Canada said on Friday.

The median forecast of analysts in a Reuters poll was for a gain of 1.0 percent in the month. Statscan's revised data showed sales were flat in February versus its previous estimate of a 0.1 percent increase.

Excluding auto products and parts, factory sales climbed 0.9 percent. In volume terms, they were up 1.7 percent.

Food manufacturers sold 3.5 percent more than in March after experiencing flat sales for the prior six months. Carmakers reported a 3.6 percent jump in sales at the factory gate and most other durable good industries also reported gains.

Inventories slid 1.1 percent and the inventory-to-sales ratio -- the number of months it would take to exhaust stock at the current sales pace -- dropped to its lowest since September 2008 at 1.32.

Despite a strengthening trend in new orders since last June, they fell 0.7 percent in March. At the same time, manufacturers worked off some of their backlog for the first time in four months, causing a 0.4 percent drop in unfilled orders. ($1 = $1.02 Canadian) (Reporting by Louise Egan; Editing by Theodore d'Afflisio)