Canadian manufacturing rebounds in July

OTTAWA — Manufacturing shipments rebounded this summer to the highest level they’ve been since March, Stats Canada’s monthly survey on manufacturing has shown.

Shipments increased in July from a sharp 2.0 percent drop in June, gaining 2.3 percent to $50.0 billion. Most of the strength came from a return to more normal shipment levels by motor vehicle manufacturers, says StatsCan.

Excluding the motor vehicle and parts industries, shipments advanced 0.4 percent in July for the fifth gain in the last six months.

Using constant dollars, which take price fluctuations into account, the volume of manufacturing shipments increased 4.3 percent — the largest increase in almost four years.

Although the bulk of the increase in July came from transportation equipment manufacturers, on an industry-by-industry basis, 12 of the 21 manufacturing industries increased in July, representing about 63 percent of total shipments.

The motor vehicle industry rebounded 17.6 percent in July to levels more in line with norms and that more properly reflect timing shifts associated with summer plant shutdowns. Over the first seven months of 2007, motor vehicle shipments were 0.7 percent higher than in the same period in 2006.

Durable goods manufacturers reported a 3.7 percent increase — the first jump in four months. Shipments of non-durable goods were up 0.7 percent, gaining for the fifth time in six months as petroleum and coal shipments resumed their upward march.

On the down side, primary metal shipments lost ground for the second time in three months, dropping 2.6 percent.

Ontario Leads Rebound:

The resurgence in Ontario’s transportation equipment industry helped to pull shipments up as a whole. The province reported a strong 5.2 percent jump in shipments after decreasing 3.9 percent in June. The transportation industry accounts for over 30 percent of Ontario’s manufacturing base.

A July rebound in auto and auto parts
manufacturing led a national shipment surge.

Some of the gains in Ontario were offset by a downturn in neighboring Quebec where shipments decreased for a third consecutive month. Primary metal manufacturers reported poor shipment results in July, down 8.0 percent, thanks mainly to a month-long strike at a major plant.

Newfoundland and Labrador reported a sharp 12.3 percent drop in shipments in July, largely due to a sizeable 42.1 percent downturn by food manufacturers.

Unfilled Orders Still Surging:

Unfilled orders gained 2.9 percent to $51.6 billion in July, for a 10th consecutive monthly increase. Aerospace products and parts, due to the long-term nature of manufacturing in this industry, accounted for about 44 percent of total unfilled orders.

Excluding aerospace, unfilled orders increased a more modest 1.8 percent from the month before. Miscellaneous manufacturers reported a 26.6 percent surge in unfilled orders in July, largely because of strength in medical equipment and supplies as well as jewellery and silverware manufacturing.

Computer and electronics manufacturers (+3.6%) and machinery manufacturers (+1.9%) also reported a rise in unfilled orders.

New Orders Jump to Record Level:

After two months of losses, new orders increased 3.2 percent, reaching an all-time high of $51.4 billion in July.

The transportation equipment industry provided most of the boost to new orders in July. Motor vehicle manufacturers saw a 17.8 percent jump, and aerospace products and parts manufacturers were up 13.1 percent. Primary metal was one of the few industries with new orders dropping, losing 2.2 percent compared to June.