Manufacturing sector prospects looking better in 2004

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Truckers hauling for the manufacturing sector should see an improvement in business in 2004 it appears the sector is regaining its optimism for growth.

Manufacturers were cautiously optimistic regarding the outlook for the first quarter of 2004, a survey of almost 4,000 manufacturers conducted by Statistics Canada indicates.

Business confidence is improving and greater satisfaction was expressed for production, finished products inventory levels and orders received, Statistics Canada reported today in its Daily Bulletin. However, manufacturers still expressed some concern with low levels of unfilled orders.

The voluntary survey conducted in the first two weeks of January, requests opinions on production impediments, finished product inventory levels, new and unfilled order levels, production and employment prospects in the coming three months.

In January, 30% of manufacturers stated they would increase production in the first quarter, while 15% expected to decrease production. Led by producers in the primary metal and transportation equipment industries, 16 of the 21 manufacturing industries contributed to the positive balance. Manufacturers in all provinces were positive about production prospects for the coming three months.

Also, 24% of manufacturers stated that orders received were, compared with 20% in October. This was the highest positive balance posted for orders received since April 2000. Again, producers in the transportation equipment and primary metal industries were the major contributors to the improved balance. According to the Monthly Survey of Manufacturing, new orders have increased in four of the last six months, and the trend continued to gradually improve. New orders in November, at $41.9 billion, were up 1.0% from October.

In January, 85% of manufacturers reported that the current level of finished product inventories was about right, 8% said inventories were too high and 7% said they were too low. According to November’s Monthly Survey of Manufacturing, finished product inventories stood at $18.9 billion, their lowest level since July 2002 and the seventh decrease in a row.

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