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INDUSTRY PULSE: Manufacturing shipments on the rise again

OTTAWA, Ont. -- Factory shipments bounced back in November mainly because of a strong showing in the transportation...

OTTAWA, Ont. — Factory shipments bounced back in November mainly because of a strong showing in the transportation equipment sector, which rebounded after hitting their lowest level in nearly two years in the third quarter, Statistics Canada reports.

Canadian manufacturers shipped goods worth an estimated $49.0 billion in November, up 2.3% from October.

Taking price fluctuations into account, the volume of shipments increased 2.0% to $44.7 billion, the largest single monthly constant dollar increase in 15 months, after trending downward for most of the year. Widespread price declines had little effect on the value of shipments, especially in the petroleum and coal industry, where the monthly drop in prices for petroleum and coal was the smallest in two years, the government agency stated in a release.

On a year-to-date basis, however, the volume of shipments has fallen 1.6% between January and November 2006, compared with the same period in 2005.

Looking forward, in November, new orders jumped by more than a billion dollars, increasing 3.9% to $49.9 billion. The manufacturing sector actually turned the corner after a 13-month downward trend in October with a modest increase. Its important to keep in mind, however, November’s increase was almost entirely a result of a one and a half billion dollar surge in orders in the transportation equipment sector, divided between an $800 million increase in motor vehicle manufacturing and a $726 million jump in aerospace orders. Excluding transportation, new orders would have risen only slightly.

Looking at shipments from a regional perspective, shipments in Ontario and Quebec benefited from resurgence in the transportation equipments sector in November.

Ontario shipments increased 3.7% to just under $24 billion. Overall, 12 of the 21 industries registered increases but it was the transportation equipment sector that led Ontario’s jump in shipments, contributing 84% of the $859 million increase. After four consecutive months of decline, when plant model change-overs were delayed, motor vehicles bounced back to the highest level since February of 2006. Excluding transportation, shipments would have risen 0.8%.

In Quebec, shipments increased 2.0% to $12.0 billion as petroleum and coal shipments rose by 8.4% to $1.2 billion. The province’s largest manufacturing industry, primary metals, continued to post strong gains, bolstered by near record commodity prices. Shipments from the aerospace and chemical industries also contributed to the November increase.

Shipments from Alberta fell by 0.7% to $5.2 billion in November. While the price of petroleum and coal products fell slightly, shipments increased by 1.8% to $1.0 billion. At the peak of prices for petroleum and coal in August 2006, the value of shipments of petroleum and coal were neck and neck with chemicals. Since then, with commodity prices falling, chemical shipments, have declined, but at a slower pace, to $1.2 billion, now nearly 20% higher than shipments from petroleum and coal.
Shipments from British Columbia declined 1.5% to $3.5 billion. Declines in the shipments of paper accounted for roughly half of this total, falling 5.8% to $459 million. Overall, 12 of 21 industries in British Columbia declined while primary metals provided the largest off-setting increase, rising 5.9% to just under one-third of a billion dollars.

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