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Transportation stalls after fourth-quarter comeback

OTTAWA, Ont. -- In spite of interruptions in the auto assembly supply chain caused by a rail strike, the transporta...

OTTAWA, Ont. — In spite of interruptions in the auto assembly supply chain caused by a rail strike, the transportation equipment sector increased shipments by 0.6% to $9.7 billion when auto plants returned to production in February, following maintenance down time in January, Statistics Canada records released this week revealed.

Motor vehicle assembly, parts and accessories industries combined gained 2.5% to $7.6 billion, recovering some ground lost in January from the recent peak of $7.9 billion in December.

At the same time, aerospace shipments fell 2.4% to $1.2 billion, a second decline following two consecutive gains.

Shipments of petroleum and coal products were up 3.9% in February on stronger prices, and volumes increased slightly in spite of a national rail strike and a refinery fire in Ontario as the industry filled orders from stocks. Increased Alberta refinery activity made up for Ontario’s shortfall.

The two week long rail strike at a single major rail carrier also disrupted the supply chain of inputs into the primary metals and chemicals industries. Consequently, shipments of chemicals fell 2.0% to $4.2 billion while smelters of primary metals shipped a mere 0.4% more in spite of a 2.8% increase in prices of primary metals and a 5.8% jump in the price of non-ferrous metals such as copper, zinc and aluminum.

Shipment values for primary metals were boosted in February by a surge in the price for nickel products (+16.9%) and, to a lesser extent, by the appreciation of copper and copper alloy products (+4.9%). Prices for these two metals were driven by export demand in Asia, which continued to be strong. Prices for nickel, a major component in the production of stainless steel, continued to rise toward a new peak, with the level of the index for February reaching 73.8% higher than the average for 2006.

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