Manufacturing shipments post first increase in three months

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OTTAWA,Ont. — Manufacturing shipments rose in July following a dismal second quarter.

Widespread increases contributed to a 1.7% rise in shipments to $43.0 billion during the month, Statistics Canada reports.

Led by motor vehicle manufacturing, 16 of 21 industries, representing three-quarters of total shipments, reported increases in July.

"The breadth of July’s increase was encouraging, since the Canadian economy has faced several setbacks in recent months," Statistics Canada commented.

Meanwhile, finished-product inventories fell back 1.0%, and new orders continued to gain ground, rising for the second consecutive month. Only the persistent downturn in unfilled orders tarnished the lustre of an otherwise positive month.

Not yet reflected in this month’s data is the impact of the electricity blackout of August 14 on Ontario manufacturing shipments.

Meanwhile, Canada’s largest trading partner, the United States, continued to show signs of recovery. Following an extended period of weak output, the U.S. economy has been more upbeat in recent months. U.S. manufacturers boosted shipments by 2.5% in July, following a 1.5% increase in June. Manufacturers also continued to reduce inventory levels, which now stand at the lowest level since September 1997.

Ontario led the six provinces reporting higher shipments in July. Motor vehicle manufacturing, coupled with increases in the machinery and petroleum industries boosted shipments in Ontario by $706 million (+3.1%) to $23.1 billion. Manitoba (+$30.2 million) and British Columbia (+$26.9 million) recovered somewhat in July, following extended periods of reduced manufacturing activity.

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