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INDUSTRY PULSE: Drop in manufacturing shipments is widespread

OTTAWA, Ont. -- In April, two-thirds of the manufacturing industries, accounting for 66% of total shipments, posted...

OTTAWA, Ont. — In April, two-thirds of the manufacturing industries, accounting for 66% of total shipments, posted declines in their shipments, according to Statistics Canada data released today.

Both the durable (-1.8%) and nondurable goods (-1.1%) sectors recorded lower shipments for the month.
A quarter-end boost in production in March by some aerospace manufacturers led to a larger than normal drop in production in April. Production of aerospace products and parts fell 37.8% to $892 million in April, following last month’s 38.2% surge. Despite the decline, a gradual recovery in global demand for aircraft and parts has fuelled growth in Canada’s aerospace industry compared to last year.

Food manufacturers also reported wide ranging declines, as shipments tumbled 4.2% to $5.6 billion. Decreases were extensive and included the dairy products, grain and oilseed milling and meat products industries.

The fabricated metal products industry also registered a 3.4% drop in shipments to $3.1 billion, following some big orders shipped in recent months.

In spite of strong demand and sky-high prices for primary metals and petroleum, the strength of these industries only partly offset the overall decline in shipments for April.

Soaring prices contributed to a 5.5% jump in shipments of primary metals to $4.4 billion. Robust demand and low inventories for certain metals, including copper, zinc and nickel, have driven up prices in recent months. The industrial price index of primary metals has risen 13% since December, soaring 6.4% in April alone.

Motor vehicle shipments increased 2.7% to $5.3 billion in April, following a 6.8% decline in March due to temporary plant closures. Notwithstanding April’s gain, the auto sector continues to struggle with a range of challenges from weakening retail sales in North America, to rising interest rates and high consumer debt in the United States. Year-to-date shipments of motor vehicles were down 9.5% in the first four months of 2006 compared to the same period in 2005.

Petroleum shipments rose 2.6% to $4.9 billion in April and might have been higher but temporary refinery shutdowns largely counterbalanced the 9.6% spike in petroleum prices.

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