INDUSTRY PULSE: Transportation equipment drives manufacturing

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OTTAWA, Ont. — Robust demand for heavy duty trucks and Canadian-built autos and light trucks boosted motor vehicle shipments 5.9% to $6.4 billion in January, leading the way for January’s increase in shipment levels.

"In recent months, some manufacturers of heavy trucks have experienced a shortage of parts, which is now contributing to the sizable gain in January’s shipments of motor vehicles as product starts to move again.," Statistics Canada notes in its Daily Bulletin.

Meanwhile, Canada is home to the assembly of several popular models of automobiles and light trucks, which also contributed to the overall boost in shipments. January marked the second increase in a row for motor vehicle shipments. The industry’s trend has been slowly improving over the last couple of months.

On the whole, the transportation equipment sector, which also includes aerospace and motor vehicle parts manufacturing, posted an 8.6% rise in shipments, according to Statistics Canada records. Excluding the transportation sector, total manufacturing shipments remained up a healthy 1.5%, further confirming the extent of the bounce back in manufacturing activity in January.

However, recent reports have indicated a slowdown in automobile sales, particularly in the United States. High gasoline costs and over-consumption of new cars in recent years are some of the several factors which may contribute to a softening of demand in the months to come. Close to 80% of Canadian-made vehicles are exported south of the border.

Production of aerospace products and parts soared 32.8% to $1.3 billion in January, the highest level since the summer of 2001. Unfilled orders for aircraft and parts, which bottomed out at $11 billion in September 2004, have been gradually on the rise once again. The machinery (+7.7%) and the motor vehicle parts (+5.3%) industries also reported healthy increases in shipments to start the new year.

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