OTTAWA, Ont. — The high cost of gasoline and a rise in borrowing costs may be partly contributing to the sharp drop in shipments of motor vehicles and parts in March. Following a 4.3% decline in February, motor vehicle manufacturers continued on the same course, reducing shipments a further 11.4% to $5.4 billion.
Also feeling the pinch of a slowdown in the manufacturing of motor vehicles, the parts industry posted a sharp 10.2% drop in shipments to $2.5 billion in March. The motor vehicle parts industry has been on a weakening trend over the last year; shipments now stand at a 19-month low.
Recent announcements by some motor vehicle manufacturers of temporary plant closures in April and May do not bode well for future shipments in the short term for the motor vehicle and parts industries.
Aerospace products and parts production also slowed in March, falling 16.8% to $938 million. Despite the drop, orders for aircraft and parts have been picking up in recent months, which may translate into production in the months to come. Following several years of trimming bottom lines and corporate restructuring, several global airlines are now placing orders to upgrade their fleets with new, fuel-efficient aircraft.
Slightly offsetting some of the decrease in March were higher shipments of petroleum and coal products (+7.3%) and a recent surge in the production of railroad and rolling stock (+13.8%).
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