INDUSTRY PULSE: Both durable and nondurable goods manufacturing pull back

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OTTAWA, Ont. — Traditionally, July is the month when some factories seasonally slow production for annual employee vacations, introduce product changes on assembly lines and carry out maintenance shutdowns. July 2005 was no exception, with key industries including motor vehicles and wood products reporting shipment declines that were somewhat larger than in previous years

Shipments of motor vehicles dropped 4.7% to $5.5 billion in July, Statistics Canada reports. Summer shutdowns at various assembly lines, in addition to extended shutdowns at some plants, have contributed to a larger-than-seasonal decline in shipments this year. Compared to one year ago, motor vehicle shipments were down almost 15% in July.

The trend for shipments of motor vehicles has been steadily weakening since the summer of 2004, as some companies attempted to clear their retail inventories with incentive programs and low cost financing.

Paper manufacturers posted shipments of $2.6 billion in July, a decrease of 5.6%. Lower prices for pulp and paper, coupled with maintenance shutdowns contributed to the fifth decrease thus far in 2005. In addition, the price of lumber and other wood products decreased 1.4% in July, also contributing to a 3.6% decline in wood product shipments.

Partly offsetting the overall decline in shipments, production of aerospace products and parts surged 23.7% to $1.3 billion, as manufacturers worked through orders. Recent contracts in the railroad rolling stock industry also contributed to a 29.1% jump in production to $377 million.

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