Auto parts drag shipments down again

OTTAWA — Following a strong three percent gain in March, manufacturing shipments edged back down in April by 0.6 percent to an estimated $49.7 billion.

However, excluding the motor vehicle parts and accessory industries, shipments increased by 1.0 percent in April — led by primary metals and petroleum and coal products, Stats Canada reports in its monthly manufacturing survey.

Shipments fell in 12 of 21 manufacturing industries, which represent about 51 percent of total output.

Shipments in the transportation equipment sector plunged 7.6 percent in April, offsetting most of the 8.6 percent advance posted the month before.
Shipments of motor vehicles tumbled 11.1 percent to $5.0 billion. Shipments had surged in March following a rail strike that had affected motor vehicle manufacturers in February. In addition, after a strong March due to quarter-end production, the aerospace products and parts industry decreased 6.4 percent.

On a positive note, though, continued demand in Asia for primary metal pushed both shipments and prices higher. Shipments 5.9 percent in April to $4.8 billion, the highest level on record; and the third consecutive monthly increase after a period of relative stability in the latter half of 2006.

Also, petroleum and coal product manufacturers remained very strong, advancing 4.5 percent from March to a level not seen since August 2006.
As usual, the provinces each moved with their core industries.

Following March’s 4.0 percent surge, Ontario’s manufacturers posted a 2.0 percent decline (-$490 million) due to weakness in the auto sector.

Manufacturers’ inventories have hardly
increased since last year.

Shipments had been stronger than normal in March, due to the end of a
Manitoba’s manufacturing sector also gave back most of March’s considerable gains (+11.8%), as shipments tumbled 10.4 percent; while in Quebec shipments advances slightly (1.5%) on the back of healthy demand and rising prices for primary metals.

Unfilled Orders Continue Upward:

As a result of robust growth in April, unfilled orders were up 1.9 percent to $47.6 billion — their highest level since November 2001 — and the seventh consecutive monthly increase.

Unfilled orders have been slowly improving following a slight cool down in the summer of 2006.

Inventories Hiked:

For only the second time in the last six months, manufacturer’s total inventories increased by 0.7 percent to $62.8 billion. Despite the slight increase in April, inventories have been trending down slowly over the last half year, after hovering at near record levels for several months in the fall of 2006.

But compared to the United States, Canadian manufacturers’ inventory levels have remained relatively stable over the past few years, says StatsCan.

Inventory levels in Canada were only 2.4 percent higher than in April 2004. In the United States, however, the manufacturing sector has seen significant growth in inventory levels during the same period, rising 23.7 percent over the past three years.