INDUSTRY PULSE: April manufacturing shipments up after two months of declines

Avatar photo

OTTAWA, Ont. Following substantial declines in February (-0.9%) and March (-2.2%), manufacturers posted a 0.9% increase in shipments to $50.2 billion in April.

At 1997 prices, shipments edged up 0.1% to $46.9 billion in April, following a 2.2% drop in March.

Manufacturing shipments appear to have essentially plateaued since October 2004, despite monthly volatility in some industries, according to Statistics Canada.

"Manufacturers have remained resilient despite some less-than ideal economic influences," Statistics Canada commented in its Daily Bulletin, pointing to the ongoing geopolitical unrest and concerns over US domestic petroleum supplies, rising input costs, increased global competition and an appreciated value of the Canadian dollar.

"According to the latest Business Conditions Survey, manufacturers reported that they would maintain the same level of production in the coming three months. The most recent survey seems to confirm their expectations. On the other hand, manufacturers did express concern with the low level of unfilled orders going into the second quarter of 2005. Strong domestic and foreign demand, which has fuelled several manufacturing industries, may impact some of these concerns," Statistics Canada comments.

Unfilled orders, which may contribute to future shipments if they are not cancelled, have been on an upward trend since November and by April, reached the highest level since March 2003. Currently, unfilled orders are up a substantial 7.4% compared to one year ago.

The aerospace products and parts industry (+2.4%), primary metals (+5.9%) and fabricated metals (+1.8%) were the main contributors to the rise in orders in April. Following a string of recent order announcements, the aerospace industry continued to show strength. Unfilled orders rose for the fourth time in the last five months, improving to $12.6 billion in April. Excluding the aerospace industry, unfilled orders remained up 0.6%.

The volatile transportation equipment sector (+5.2%) boosted shipments of durable goods 1.9% to $28.5 billion. In recent months, weakness in the motor vehicle and parts industries, plus the irregular production of aerospace products, contributed to a general decline in durable goods manufacturing. Meanwhile, shipments of non-durable goods slipped back 0.3% in April.

Motor vehicle parts manufacturing rose 9.6% to $2.7 billion in April, largely offsetting March’s 10.5% decline. Despite April’s rise, which was only the second increase in seven months, considerable uncertainty remains in the automotive and parts sector.

Some motor vehicle plants have temporarily shut or slowed assembly lines in recent months to control inventories and to cut costs. This has contributed to the ongoing downward trend of the motor vehicle parts industry, which began in early 2004.

The motor vehicle industry boosted shipments 2.6% to $5.6 billion in April. Despite the rise, the value of shipments was down substantially from the recent high ($6.4 billion) in January and the short-term prospects are not encouraging, as some plants have announced further shutdowns in May.

The aerospace products and parts industry reported a 13.3% jump in production to $1.1 billion. A build-up in orders has contributed to the gains in this once beleaguered industry. Offsetting some of April’s overall increase were paper (-2.1%) and wood products (-1.7%) manufacturing.

Despite some significant month-to-month variability of “high-profile” industries, including motor vehicles and aerospace, other manufacturing sectors have picked up the pace to fill the void. Improved demand and high industrial prices have boosted shipment levels of various industries in 2005, which offset the weakness in some of the more volatile industries. As a result, the trend for total shipments has been relatively constant since October 2004.

Avatar photo

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.

Have your say

This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.