OTTAWA — Even with a sharp spike in petroleum products prices, manufacturing shipments took a step back in April, losing most of March’s gains.

According to Stats Canada’s monthly survey on manufacturing, a substantial drop in the production of aerospace products and parts was largely behind April’s 1.5 percent decrease in shipments, which stood at $50.4 billion. This was the third decline so far in 2006, and followed March’s 1.6 percent advance in shipments.

Uncertainty in the manufacturing sector, due in part to the strengthened value of the Canadian dollar and soaring input costs, have contributed to some weakness in shipment activity, states the report. As a result, the trend of the inventory-to-shipment ratio has been on a gradual, upward movement over the last few months.

The strength of primary metals and petroleum only partly offset the overall decline in shipments for April.

Two-thirds of the manufacturing industries, accounting for 66 percent of total shipments, posted declines in April. Both the durable (-1.8%) and nondurable goods (-1.1%) sectors recorded lower shipments for the month.

Food manufacturers also reported wide ranging declines, as shipments tumbled 4.2 percent to $5.6 billion. Decreases were extensive and included the dairy products, grain and oilseed milling and meat products industries.

The fabricated metal products industry also registered a 3.4 percent drop in shipments to $3.1 billion, following some big orders shipped in recent months.

Soaring prices contributed to a 5.5 percent jump in shipments of primary metals to $4.4 billion. Robust demand and low inventories for certain metals, including copper, zinc and nickel, have driven up prices in recent months. The industrial price index of primary metals has risen 13 percent since December, soaring 6.4 percent in April alone.

April saw the return of record high prices for petroleum products. By mid-month, the price of crude oil exceeded $73 US per barrel, surpassing its previous apex in September 2005.

Motor vehicle shipments increased 2.7 percent to $5.3 billion in April, following a 6.8 percent decline in March due to temporary plant closures.

“Notwithstanding April’s gain, the auto sector continues to struggle with a range of challenges from weakening retail sales in North America, to rising interest rates and high consumer debt in the United States,” notes Stats Can.

Manufacturers produce less in April:

The volume of goods shipped also fell for the third time in the last four months. At 1997 prices, shipments dropped 1.4 percent to $46.8 billion.

“Notwithstanding the many challenges of the last year, manufacturers have held their own as the volumes of goods shipped remained relatively stable over the last 12 months. That said, these challenges may have eroded opportunities for market expansion and employment growth.”

Meanwhile, new orders fell 2.3 percent to $50.1 billion in April. The aerospace industry has been partly responsible for the flux in new orders received in recent months. Excluding aerospace products and parts, new orders were down 1 percent.

With the recent erosion in both the value and the volume of goods shipped, dissatisfaction has emerged among manufacturers as reported in the April Business Conditions Survey. “Manufacturers are anticipating tough times in the months ahead as the effects of the high-valued Canadian dollar and soaring input costs continue to cut into their bottom lines,” states the report.