INDUSTRY PULSE: Motor vehicle slowdown weakens January shipments

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OTTAWA, Ont. — Manufacturing shipments continued on an erratic course in January as the ever-volatile motor vehicles and parts industries pulled down total shipments, despite strength in several resource-based industries, Statistics Canada reported this week.

Shipments declined 0.7% to $51.8 billion in January, following a 1.8% advance in December. A substantial drop in motor vehicles and parts manufacturing largely contributed to January’s weakness. Excluding the motor vehicles and parts industries, shipments actually edged up by 0.3%.

“Over the past 18 months, the manufacturing sector has experienced considerable volatility as some key industries struggled, while strong global demand fuelled expansion in other industries. This has also generated some significant disparity across the country in terms of shipment activity,” Statistics Canada commented in its Daily Bulletin, adding that the soaring value of the Canadian dollar, which recently closed at a 14-year high, has been a source of challenge for manufacturers. The majority of products produced in Canada are sold abroad, and the high-valued dollar makes Canadian exports more expensive in the global marketplace.

January’s decline was not widespread as only 7 of the 21 manufacturing industries reported lower shipments, although these industries accounted for just over one-half of the value of total shipments.

Although seven provinces posted decreases in January, Ontario (-$554 million or -2.1%) was the hardest hit of the lot. Sustained strength among Quebec’s manufacturers (+$146 million or +1.2%) and a big bounce-back in Manitoba (+$103 million or +9.8%) following a weak December, partly offset the decline overall.

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