OTTAWA, Ont. — Despite widespread concerns over the rising value of the Canadian dollar and soaring prices for crude oil that hit record highs late in the year, Canadian manufacturing shipments in 2004 rose at their fastest pace since the boom years at the turn of the millennium.
In total, Canadian manufacturers shipped goods worth $592.2 billion, up 8.5% from 2003, Statistics Canada reports in its year-end review of manufacturing shipments released today. This was the largest annual gain since 1999, when shipments rose 16%, and 2000, when they were up 10%. This was also a marked resurgence following the 0.8% decline in 2003.
Shipments increased at rates below the national average in only four provinces: Prince Edward Island, Nova Scotia, Quebec and Ontario. However, all provinces reported record high levels of shipments.
Among the key factors influencing manufacturing last year were record high industrial prices, a dollar valued at the highest level in over a decade and soaring foreign demand.
Strong international and domestic demand fuelled high industrial prices for various commodities including steel and wood products, while crude oil briefly grazed the US $55-a-barrel mark in late October, a record high at the time.
The Canadian dollar also hit a 12-year high in the final quarter of 2004 at the expense of the American greenback. This prompted widespread concern as Canada’s manufacturing sector is critically dependent on external trade.
There is need for caution, however, despite the strong numbers.
"Although Canada’s factories came out of the starting blocks with a bang, the year ended on a less than stellar note. By the final quarter, shipments began to wane as new orders slowed. Gains in most provinces occurred in the first eight months of the year," Statistics Canada notes in its report.
In Ontario, the nation’s industrial heartland, shipments were up 7.0%, thanks to robust activity in the motor vehicles and parts industries, food and chemical products manufacturing. Ontario accounted for 52% of the nation’s manufacturing shipments last year.
Saskatchewan’s manufacturing sector enjoyed a record-breaking year, as shipments soared 21.9% to $9.6 billion, the fastest rate of growth in the country.
Growth was widespread. Saskatchewan’s traditional, resource-based industries led the way, with high industrial prices contributing to the successful year. In particular, wood and chemical products manufacturing had exceptionally strong gains.
With its rich natural resource base, Alberta shipments increased a substantial 16.0% to $53.2 billion, the second highest rate of growth
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