Shipments up thanks to auto, aerospace industries: Stats Can

OTTAWA — The transportation equipment sector was again the key Canadian mover in October, as a sizable jump in motor vehicle manufacturing gave Ontario’s manufacturing sector a needed boost.

Total shipments, according to a monthly report by Statistics Canada, increased by 0.9 percent to $52 billion. Meanwhile, new contracts in the aerospace industry led to a 1.4 percent surge in unfilled orders.

Overall, six provinces and the Yukon reported higher shipments in October. The bounce back in motor vehicle manufacturing lifted shipments in Ontario by $424 million (+1.6%) to $26.7 billion, leading all provinces. However, the picture changes in Ontario when the motor vehicle and parts industries are excluded, with shipments falling 0.2 percent in October.

Manufacturing in Quebec rose by $62 million (+0.5%) to $12.2 billion, the fourth increase in the last five months. British Columbia posted a $53 million (+1.5%) gain in shipments to $3.6 billion, making up for a weak September (-0.5%).

Six provinces and the Yukon
reported higher shipments

Although total manufacturing was up in October, the increase was quite concentrated as only 10 of the 21 manufacturing industries, accounting for 57 percent of the total, posted higher shipments, according to StatsCan.

Following a weak September (-7.3%), manufacturers of motor vehicles bounced back in October with shipments rising 7.6 percent to $6.2 billion. October’s gains were attributable to a boost in production of 2006 models by some plants, coupled with the fact that Canada is currently home to the assembly of several popular makes of cars and light trucks in North America.

Excluding the volatile motor vehicle and parts industries, total manufacturing shipments remained unchanged from September’s level.

“The motor vehicle industry is in the midst of restructuring itself in light of soaring costs, shifting product demand and offshore competition,” says the report. “Recent reports of plant closures and significant job cuts, coupled with announcements of major investments in infrastructure, weigh heavily on the future prospects of motor vehicle manufacturing.”

In light of the big gain in motor vehicle shipments, manufacturers of chemicals, railroad rolling stock and machinery also contributed to the rise.

Strong demand, coupled with a tight supply of product in the United States, has bolstered prices of chemical products. Shipments rose another 2.2 percent to $4.2 billion, the third successive increase.

Offsetting some of the increases, however, was a sharp 3.2 percent drop in the industrial price of petroleum in October. The price shift pulled down the value of shipments of petroleum and coal products by 2.4 percent from September’s record level of $5.2 billion.

Meanwhile, new contracts received by aerospace manufacturers improved the industry’s backlog of orders by 4.2 percent to $13.5 billion, and was largely responsible for the October increase. Excluding the aerospace products and parts industry, unfilled orders edged up 0.2 percent for the month.

The plastics and rubber products (+14.3%) and fabricated metal products (+0.9%) also reported higher unfilled orders in October. They were partly offset by a 3.8% decline in orders for railroad rolling stock, although this industry has received a stream of orders in recent months.