Manufacturing takes step back

OTTAWA — Manufacturers had a notable pull-back in sales in August following four consecutive monthly increases, reports Stats Canada.

Sales decreased 3.7 percent to $52.0 billion, erasing most of the gains in previous months. The largest contributor to the decrease was the petroleum and coal products industry, where sales have fallen by nearly one billion dollars in two months.

The decreases in sales were widespread, with 18 of the 21 manufacturing industries, accounting for 96 percent of total sales, reporting declines.

Petroleum and coal product manufacturers accounted for almost one-third of the drop in manufacturing sales for the month, falling by 7.7 percent. The drop was due to falling prices (-5.9%), and unplanned production slowdowns at two major plants.

Primary metal manufacturers also reported a sizeable 7.9 percent decrease, the first decline in 10 months.

After edging back up in the last few months, transportation equipment industry fell 4.3 percent in August.

Only manufacturers in Saskatchewan and Manitoba managed to increase sales during the month, with gains of 5.7 percent and 1 percent respectively.

In the Atlantic provinces, manufacturing sales fell a whopping 15.4 percent, while in Ontario sales dropped 3.1 percent, with primary metal manufacturers (-13.4%) recording the largest dip.

Inventory Levels Climb

Meanwhile, manufacturers reported a 0.3 percent rise in inventories in August, a sixth consecutive monthly increase.

Inventories had trended downward throughout most of 2007 before the string of gains in 2008. Most of the increase was due to higher raw material inventories.