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INDUSTRY PULSE: June’s manufacturing shipment volumes a ray of sunshine

OTTAWA, Ont. -- Manufacturing shipments increased 1.9% to $51.4 billion in June, the highest level since January 20...

OTTAWA, Ont. — Manufacturing shipments increased 1.9% to $51.4 billion in June, the highest level since January 2006, Statistics Canada reported today.

While the trend is positive, Statistics Canada points out that shipments have remained in the $50 billion to $52 billion a month range which they have occupied for the last two years.

The manufacturing sector has managed to maintain this level of shipments despite of the challenges of a rising Canadian dollar and increased global competition, the statistical agency noted in its Daily Bulletin.

Over the second quarter, shipments were down 0.4% from the first quarter but up 0.6% compared to the same period in 2005. Controlling for price fluctuations, total shipments increased by 0.7% in June.

Gains were posted in 13 of 21 manufacturing industries in June, accounting for 80% of total shipments.

Durable goods shipments increased by 1.1% to $28.8 billion, thanks to quarter end shipments of computer and electronic equipment, which rose 5.4% to $1.8 billion.

At the same time, the transportation equipment industry perked up with a 1.5% increase after months of decline or marginal growth.

North American consumers’ increasing appetite for smaller, more fuel efficient vehicles may bode well for automotive manufacturers in Canada and reverse the negative trend observed over the past nine months, Statistics Canada commented in its Daily Bulletin.

Shipments of motor vehicles increased 3.0% to $5.1 billion while aerospace slipped by 3.1% to $1.1 billion.

Shipments of non-durable goods increased 2.8% to $22.6 billion, led by increased production of petroleum and coal products as refinery output returned to normal production levels following maintenance shutdowns in May. Petroleum product shipments increased 13.5% to $5.2 billion and was largely volume driven, as the price of petroleum and coal products rose by only 0.6% in June.

June was a particularly good month for Ontario and Quebec and resource-rich Alberta and British Columbia. However, Saskatchewan, Manitoba and the Atlantic provinces suffered declines in shipments of manufactured goods.

Quebec shipments jumped 4.8% to $12.7 billion, mainly due to increased refinery output, which reclaimed the number two spot among Quebec industries. Aerospace shipments declined by 2.4%, a moderation of the large swings seen in recent months.

In Ontario, the transportation industry, which accounts for nearly a third of Ontario’s manufacturing output, increased 2.2% to just under $8.0 billion. This was the main reason behind Ontario’s 1.2% jump in shipments to $25.2 billion. Automotive shipments rose by 3.7% to just under $5.0 billion, as auto plants increased output in anticipation of maintenance shutdowns to come in July. Also, popular new models are assembled in southern Ontario plants, along with smaller more fuel efficient vehicles. These plants have become the beneficiaries of a growing consumer shift from large luxury vehicles to economy vehicles now that higher gas prices have persisted in Canada and the United States.

Alberta petroleum refiners increased shipments by 6.1% to $1.1 billion, even though prices rose only marginally. Overall, shipments from Alberta manufacturers increased 3.3% to $5.4 billion while in British Columbia, total shipments improved by 1.1% to $3.9 billion, led by increases in shipments of paper, petroleum and coal.

Lower prices for seafood products and a break from record shipments of primary metals resulted in a 3.1% drop in shipments from the Atlantic provinces to $2.4 billion.

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