OTTAWA — Canadian manufacturers shipped goods worth an estimated $47.7 billion in October, down 0.1 percent from September and the lowest level since December 2004, mainly due to falling petroleum prices and a slowdown in the food and transportation equipment sectors.

While the rate of decline has eased, reports Stats Canada, shipments have fallen for three consecutive months.

After taking price fluctuations into account, the volume of shipments was down 0.6 percent to $43.7 billion, the lowest volume of shipments in nearly four years.

According to the Labour Force Survey, manufacturing employment continued its downward trend, falling by 15,000 and down 83,000 over the first 10 months of 2006. The lion’s share of the losses were experienced in Ontario and Quebec, says StatsCan.

After taking price fluctuations into account, shipments
were the lowest they’ve been in nearly four years

Lowest Vehicle Output in Over Three Years:

Despite a relatively strong month of automotive sales on both sides of the border, shipments in the motor vehicle industry fell 1.0 percent to $4.5 billion, the lowest level in over three years. This was due, in part, to a late start launching some 2007 model vehicles.

A combination of a slowdown in auto assembly and increased sourcing of parts from off-shore suppliers resulted in shipments falling from auto parts suppliers by 2.4 percent to $2.1 billion, says Statscan. It was the fourth monthly decline and the lowest level of shipments since June 1998.

Transportation equipment fell 1.4 percent to $8.8 billion, the fourth consecutive decline and seventh monthly drop this year.

Meanwhile, aerospace shipments fell 9.4 percent to $1.2 billion following strong quarter-end deliveries in September. Due to the high value of product of the aerospace industry, monthly swings of plus or minus hundreds of million dollars are not unusual.

As for energy, Canadian refineries continued to produce at normal levels, but at reduced prices. Consequently, shipments of petroleum and coal products fell 6.2 percent to $4.4 billion as prices declined by 6.3 percent due to burgeoning inventories of gasoline and crude oil in the U.S.

New orders looked brighter as computer
and electronics sectors posted gains

Shipments Increase in Seven Provinces:

However, despite declines in Ontario, shipments were positive in seven provinces. All Atlantic provinces but New Brunswick posted gains. New Brunswick, which accounts for nearly half of the region’s manufacturing shipments, was more affected by lower prices for petroleum products and total shipments consequently fell 10.6 percent.

In Quebec, thanks to strong gains in primary metals, shipments increased 1.2 percent to $11.9 billion.

Declines in Ontario’s manufacturing industries were modest but widespread as two-thirds of them lost ground. Total shipments slipped 0.4 percent to $23.0 billion in October.

In Alberta, a three-month slide in oil prices was behind a 1.9 percent drop in shipments to $5.2 billion, while on the Prairies, shipments fell 0.9 percent to $7.3 billion.

Some New Orders Up:

In October, new orders increased by 0.6 percent to $47.8 billion. Despite the modest increase in October, the series for new orders has generally been trending downward for the last 13 months. Contributing to October’s increase were gains in the computer and electronic products industry (+14.1%), the machinery industry (+7.2%), fabricated metals (+9.6%) and primary metals, (+10.1%).

Nearly offsetting these increases were declines in the transportation equipment industry, particularly in the aerospace industry, and a drop in year-end orders for heavy trucks as the industry prepares for a downturn in 2007.