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Canadian Manufacturing Shipments Unchanged in May
July 17, 2007
After a slight decrease in April, manufacturing shipments in Canada remained virtually unchanged in May (-0.1%) at  ; $49.7  ; billion. Manufacturing shipments had trended slowly downwards throughout most of  ; 2006, before posting a strong first quarter in  ; 2007.
Manufacturers continued to face several challenges during May. The Canadian dollar appreciated significantly against its American counterpart, reaching a 30-year high by the end of May. In addition, the Labour Force Survey reported a  ; 0.6% drop in manufacturing employment during the month, a loss of  ; 12,300  ; jobs.
Despite these challenges, the volume of manufacturing shipments, using constant dollars, rose  ; 0.4% to  ; $45.5  ; billion. After increasing in seven of the last eight months, constant dollar shipments reached their highest level since the beginning of  ; 2006. The constant dollar measurement takes price fluctuations into account, providing an indicator of the volume of shipments during the month.
On a sector by sector basis, only 9 of 21 manufacturing industries decreased in May, but they represented about 57% of total shipment outputs.
Durable goods were the main source of weakness in May, declining  ; 1.2% to  ; $26.7  ; billion, following a sharper loss of  ; 2.0% the previous month. Among durable goods producers, primary metal manufacturers posted one of the most significant declines during the month.
On the other hand, shipments of non-durable goods continued to strengthen, especially in resource-based industries. Manufacturers of petroleum and coal products, chemical products, and plastic and rubber products pushed non-durable good shipments up  ; 1.2%, the fourth consecutive monthly increase.
Unfilled factory orders continued to increase, rising  ; 1.8% in May for an eighth consecutive monthly gain. Unfilled orders can be used as an indicator of probable future shipments. New orders, which may include orders received and shipped during the month, slipped  ; 0.5%.
By sector After four months of strong gains, primary metal manufacturers reported a  ; 4.1% decrease in shipments during May. Demand in Asia for primary metal products combined with rising prices had steadily pushed shipment values higher since the beginning of  ; 2007. However, a two-week shutdown of a major manufacturing plant, combined with a  ; 1.2% drop in prices compared with April, had a dampening effect on the industry in May.
Transportation equipment manufacturers posted mixed results in May, edging down  ; 1.3%. Motor vehicle shipments slipped an additional  ; 1.2% in May after a sizeable  ; 11.9% decrease in April. A rail strike earlier in  ; 2007  ; resulted in some subsequent volatility within the industry. Automotive parts shipments also decreased (-2.9%), following a similar-sized drop in April. Temporary plant shutdowns as well as a plant closure in May had an impact on the results for automotive parts manufacturers.
Shipments of aerospace products and parts were a bright spot in the transportation industry, reversing April's decrease with an  ; 8.7% surge in May. Shipments within this sector have been trending upward since the beginning of  ; 2006.
Petroleum and coal manufacturers reported a  ; 4.1% increase in shipments, a fifth consecutive monthly gain. Shipments had eased slightly in the fall of  ; 2006  ; as prices pulled back somewhat. However, shipments in May rose close to the record levels last seen in the summer of  ; 2006, in part due to price increases in recent months.
By province A strong performance in the Prairie Provinces helped to balance out what was an otherwise lacklustre May for manufacturers in Central and Eastern Canada. Nationally, six provinces experienced a drop in total manufacturing