OTTAWA — Escalating oil prices coupled with a rebound in the production of motor vehicles and parts contributed to a strong 3.3 percent gain in the value of manufacturers’ shipments to $51.9 billion this past August.

In addition, a stream of new orders in August may bode well for manufacturers’ prospects in the coming months, reports Statistics Canada.

The volatile motor vehicle industry, which comprised approximately 12 percent of total shipments in August, once again topped the manufacturing sector in terms of shipment activity. Motor vehicle manufacturers posted stronger-than-normal gains in shipments of 10.5 percent to $6.1 billion in August.

Several automobile manufacturers were in full production of the 2006 models to stock showrooms in the fall. In addition, August’s rebound in motor vehicle manufacturing followed a notably weak July when assembly lines were slowed due to seasonal shutdowns for employees’ vacations and product changeovers.

Ontario shipments got a boost with a rebound from the auto sector

That means the auto-dependant province Ontario, posted the largest rebound. Following a weak July, Ontario’s motor vehicle, petroleum and primary metals industries contributed to a $1.4 billion (+5.7%) advance in shipments to $27 billion, the highest level so far in 2005.

Strong demand and a 6.5 percent jump in the price of petroleum and coal products pushed shipments above the $5 billion mark for the first time.

Unplanned refinery closures and the threat of tropical storms in the southern US set in motion the recent surge in the price of crude oil in August. By month’s end, the price of crude oil surpassed US $70 per barrel, the highest on record, as Hurricane Katrina battered the US Gulf Coast. Petroleum shipments have risen almost 30 percent in value since the close of 2004.

Although August’s gain in shipments was concentrated in the price-influenced petroleum industry and the volatile transportation equipment sector, the spurt of activity on the factory floor was wide ranging. Increases were reported in 16 of 21 manufacturing industries, accounting for almost 90 percent of total shipments.

Excluding the motor vehicle, parts and petroleum industries, shipments remained up a healthy 1.1 percent. Both the durable goods (+2.7%) and nondurable goods (+4.2%) sectors fuelled August’s gain in manufacturing.

The marked increase in manufacturing activity in August contributed to an improvement in the trend for shipments. Although higher industrial prices were a factor in the rise of shipments in August, a share of the increase was volume based as shipments jumped 3.6 percent to $48.1 billion at 1997 prices.