Loonie props up manufacturing despite monthly slip
OTTAWA — Manufacturing sales fell only modestly in October (0.5%) — thanks mainly to a steep drop in the value of the Canadian dollar — but it was for a third consecutive monthly drop in sales.
The Canada-US exchange rate, as well as a notable decrease in the price of petroleum and coal products, affected October’s manufacturing results, according to Stats Canada.
The change in the exchange rate had a strengthening effect for manufacturers who determine their prices in US dollars. On the other hand, the price of petroleum and coal products dropped 13.5 percent, reducing the value of sales in that industry.
Statscan reports that eight out of 21 manufacturing industries, accounting for about 40 percent of total sales, posted decreases.
Petroleum and coal product sales led the slippage, posting a decline of 7.3 percent, largely due to lower prices.
On the other hand, the transportation equipment industry advanced 2.3 percent, led by aerospace products and parts production, which increased a whopping 23.7 percent during the month.
Alberta Reports Largest Drop in Years:
Seven provinces reported a decrease compared with September. Only New Brunswick, Quebec, and British Columbia reported gains during the month.
Manufacturing sales in Alberta fell 6.8 percent, erasing all the gains registered since May 2008. A refinery plant shutdown, combined with a drop in prices, led to a 21.2 percent decrease in the sales of petroleum and coal products in October. Chemical product manufacturers also contributed to the drop, as their sales declined 8.6 percent.
Manufacturing sales in Ontario decreased for a third consecutive month as motor vehicle manufacturing sales fell 5.7 percent.
Inventory Levels Trend Higher:
After falling to a two-year low in February 2008, inventory levels posted seven increases in eight months. Levels rose another 1.3 percent to $68.6 billion, as 16 of 21 industries reported higher numbers.
Aerospace inventories rose 10.7 percent, motor vehicle inventories hiked 9.1 percent, and computer and electronic product manufacturers reported a notable increase of 6.5 percent.
Unfilled orders posted an increase of 6.8 percent, entirely attributable to the rise of 13.9 percent in aerospace manufacturing, says Statscan.
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