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INDUSTRY PULSE: Manufacturing shipments rebound in December

OTTAWA, Ont. -- Manufacturing shipments rose 1.4% to $52.1 billion in December, offsetting the 1.4% decline in Nove...

OTTAWA, Ont. — Manufacturing shipments rose 1.4% to $52.1 billion in December, offsetting the 1.4% decline in November, Statistics Canada reported today.

Canadian manufacturing stepped up production in December, with particular gains noted in the petroleum products nd auto parts industries, helping shipments bounce back from a weak November.

Demand for a wide range of manufacturing goods, coupled with some factories returning to full production following temporary slowdowns in recent months, contributed to the year-end gain.

“Alternating increases and decreases have been characteristic of the monthly shipment values in 2005. Despite December’s sizeable increase in shipments, many manufacturers have been facing an uphill battle,” Statistics Canada commented in its Daily Bulletin. “Soaring input costs, a very strong Canadian dollar and intense global competition have cut into the bottom line of the manufacturing sector. Although the upward trend for shipments persevered as 2005 drew to a close, the trend’s pace has been gradually decelerating since the summer.”

Thousands of factory jobs have been lost over the last year, as the sector attempts to restructure itself. According to the latest Labour Force Survey, there were 145,000 fewer manufacturing jobs in January 2006 compared to one year ago.

Although six provinces reported lower shipments in December, big gains in Ontario, Alberta and British Columbia were more than enough to offset the overall declines.

Shipments in Ontario rose by $526 million (+2.0%) to close the year at $26.3 billion, but December’s pick up followed a 3.0% drop in November. Despite the year-end rush, Ontario’s manufacturers posted a lacklustre 2005; shipments were up only 1.0% for the year.

Sweeping gains contributed to a healthy December in Alberta and British Columbia. Shipments in Alberta surged by $149 million (+2.9%) to $5.4 billion, marking the fifth successive increase in the province’s manufacturing sector. In British Columbia, shipments rose by $113 million (+3.1%) to $3.8 billion. The dominant wood and paper industries contributed to the increase.

Meanwhile, declines in Quebec (-$55 million) and Manitoba (-$46 million) manufacturing sectors partly offset some of the rise in total shipments.

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