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Transportation sector drives factory shipment upswing

OTTAWA, Ont. -- Canadian manufacturers ended 2006 on a positive note as factory shipments increased for the second ...

OTTAWA, Ont. — Canadian manufacturers ended 2006 on a positive note as factory shipments increased for the second month in a row in December, thanks to strength in the transportation equipment sector, reported Statistics Canada.

The year-end rally was not enough to offset several months of weak performances earlier in the year. As a result, total shipments for 2006 as a whole edged down 0.6% to $587.4 billion from the peak level in 2005.

December’s increase was widespread, with 13 sectors representing 74% of total output improving. On a monthly basis, factories shipped goods worth an estimated $49.7 billion in December, up 1.7% from November. The transportation sector, led by automobiles, shipped $10.2 billion worth of product in December, the first time in 2006 that it had surpassed the $10-billion mark.

There were no clear winners and losers among the various sectors in manufacturing last year. Taking price fluctuations into account, the annual volume of shipments fell 1.6% to $539.3 billion, a decline of nearly $9 billion.

Still, 2005 had seen the highest level of constant dollar shipments on record while 2006 real shipments were more in line with 2003 levels.

Again, taking price fluctuations into account, the volume of shipments in December rose 1.4% to $45.6 billion.

December’s shipments of durable goods jumped 3.0% to $27.5 billion, the third consecutive monthly increase following declines through the third quarter. Again, this was due to a strong showing in the transportation equipment sector.

Non-durable goods shipments edged up 0.2% to $22.2 billion in December. Higher shipments of petroleum and coal were nearly offset by declines in chemicals.

Coming off a stellar year in 2005, the appreciation of the Canadian dollar, higher raw materials costs and competition from cheaper foreign imports were growing impediments to production. Meanwhile, manufacturers in Western Canada reported a lack of skilled labour as a limiting factor to production.

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