There is yet another concrete sign that freight volumes are slowing down. Statistics Canada’s Quarterly Business Conditions Survey of manufacturing found that 43 percent of manufacturers planned to decrease production in the first quarter of 2001, while only 15 percent expected to increase production. This is the first negative balance seen since July 1998.

The Business Conditions Survey is conducted in January, April, July and October. The results are based on replies from about 4000 manufacturers and are weighted by a manufacturer’s shipments or employment.

Manufacturers in the transportation equipment and primary metals industries accounted for almost all of the decrease, according to Statistics Canada. The government agency also reports that the number of manufacturers who stated that orders were declining increased to 48 percent in January from 18 percent in October. Again, manufacturers in the transportation equipment and primary metals industries were the major contributors to the decrease. And 35 percent of manufacturers said their level of unfilled orders was lower than normal while only 11 percent said it was higher than normal. The major contributor to the decrease in the balance was the primary metals industry. Finally, in the January Business Conditions Survey, some 31 percent of manufacturers said their current level of finished products inventory was too high, up from 17 percent in October.

In the U.S., manufacturing activity shrank in January for the sixth consecutive month. The impact of the economic slowdown in the transport sector has been apparent for some time. The Department of Transportation’s Bureau of Transportation Statistics released a report showing that U.S. transportation industry profits fell 13 per cent from the second quarter to the third quarter of 2000.