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Manufacturing sector continues downslide

OTTAWA, Ont. -- Canadian manufacturing shipments tumbled in June, falling 1.8% to $48.6 billion, which is the large...

OTTAWA, Ont. — Canadian manufacturing shipments tumbled in June, falling 1.8% to $48.6 billion, which is the largest decrease of 2007 and the third consecutive monthly decline.

On a sector-by-sector basis, 13 of 21 manufacturing industries decreased, representing about 75% of total shipments.

In addition to the sharp decline in the transportation equipment industry, many other sectors also reported a drop in shipments in June. Excluding motor vehicles and parts, shipments in June were notably less weak, losing only 0.5%.

Shipment decreases were led once again by durable goods manufacturers, whose shipments dropped 3.2%, a third consecutive monthly decrease.

Transportation equipment, primary metals and machinery manufacturers were the primary contributors to the slump. Shipments of non-durable goods also fell, slipping 0.3% to $22.9 billion. Price-driven declines in petroleum and pulp and paper helped to fuel this reduction.

The automotive industry was at the forefront of weaker shipments in June. Motor vehicle shipments plunged for the third consecutive month, decreasing by almost $650 million, the largest monthly loss since August 2003. An appreciating Canadian dollar and soft conditions in the US auto market, which is the primary destination for over 85% of domestically produced automotive products, contributed to the recent downturn in motor vehicle shipments.

The four largest provinces – B.C., Alberta, Ontario and Quebec – in terms of manufacturing shipments each posted decreases in June, while the Maritime Provinces, as well as Manitoba and Saskatchewan, reported moderate-to-strong increases during the month.

Despite these decreases, second-quarter shipments still managed to gain 0.7% compared with the first quarter of 2007. This was due to high shipment levels at the start of the second quarter after a particularly strong March. Examining the first six months of this year, manufacturing shipments were up 0.1% compared with the first six months of 2006.

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