OTTAWA — It was a rise in commodity prices, not necessarily a boost in business, which allowed Canadian factories to hit their highest level of 2006 this past July, according to Stats Canada.

Canadian manufacturers shipped goods worth $49.9 billion, up 0.8 percent from June. However, if price increases were taken into account, the overall volume of shipments actually declined 0.6 percent to $45.1 billion. Little growth is seen when comparing the first seven months of 2006 to the same period in 2005.

Even with shipments increasing in half of industries,
manufacturing posted strong increases

Shipments increased in only 11 of 21 manufacturing industries in July. Durable goods shipments fell only slightly, as decreases in the aerospace and auto parts industries were not completely offset by increases in the automotive, machinery and computer and electronics industries, Stats can reports.

July’s gain was almost entirely attributed to the strong performance in the petroleum sector, where shipments rose to their highest level on record. Petroleum products shipments increased 8.4 percent to $5.8 billion in July after rising 14.8 percent the previous month.

In addition, the chemical manufacturing industry had its best month for shipments in 2006, while automotive products also had higher than normal shipments.

REGIONAL PERFORMANCE:

Provincially, July was marginally positive for Ontario. The three Prairie provinces and New Brunswick posted very strong gains in shipments. Quebec shipments fell slightly while B.C. and Newfoundland and Labrador provided the main off-setting declines.

Manufacturing shipments in Ontario rose by 0.2 percent to $24.2 billion. The transportation industry, which accounts for nearly a third of Ontario’s manufacturing output, increased 0.8 percent to $7.8 billion. Automotive manufacturing gained slightly 2.8 percent to $4.9 billion.

As usual, shipments of petroleum and coal products dominated the manufacturing sector in Alberta, which increased by 4.6 percent to $5.7 billion.

Meanwhile, British Columbia shipments fell 3.8 percent to $3.4 billion — largely as a result of a 12.1 percent drop in paper production and a 4.6 percent slowdown in wood products.

Manitoba benefited from rising commodity prices, contributing to a 10.1 percent rise in provincial manufacturing shipments to $1.3 billion.

Meanwhile, New Brunswick’s petroleum and coal industry accounted for over half of total provincial shipments, the main contributor to a 6.7 percent increase to $1.4 billion; while Newfoundland and Labrador’s 8.7 percent decline in shipments was mainly due to a 27.2 percent decrease in food production.

ORDERS:

The fabricated metals and automotive industries pushed new orders up 2.2 percent to $50.8 billion in July, while aerospace cooled off after two exceptional months. In spite of the drop in aerospace orders, the rest of the transportation industries were responsible for a 3.0 percent increase to $10.1 billion.

Meanwhile, unfilled orders rose 2.1 percent to $42.3 billion, mainly because of the transportation industry, where unfilled orders increased 3.6 percent to $21.3 billion. July’s total increase is 4.2 percent higher compared to one year ago.

INVENTORY-SHIPMENT:

The inventory-to-shipment ratio rose to 1.27 in July from 1.26 a month earlier, as did the finished-product inventory-to-shipment ratio which increased to 0.44 in July from 0.43. The inventory-to-shipment ratio is a key measure of the time, in months, that would be required to exhaust inventories if shipments were to remain at their current level, Stats can reports.