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Canadian Manufacturing: Slight Uptick in November
January 18, 2008
Source: Statistics Canada
After holding steady in October, manufacturing sales increased by 1.1% in November. Sales improved by $573 million to $50.6 billion. Almost all of the increase in manufacturing was the result of a surge in petroleum and coal product sales during the month, which benefited from sharply rising prices.
Using constant dollars, the volume of manufacturing sales remained largely unchanged in November, edging down 0.1% compared with October. Rising prices played a significant role in increasing the total value of sales, as the Industrial Product Price Index rose for the first time in seven months (+0.6%). Constant dollar measurements take price fluctuations into account, providing an indicator of the volume of sales during the month.
Overall, just 11 out of 21 manufacturing industries increased their sales in November, although this represented almost two-thirds (65.5%) of total manufacturing.
Sales of non-durable goods looked to continue a turn-around, gaining 1.6% in November for a second consecutive monthly increase. These increases followed on the heels of four months of declining sales. Durable goods also reported an increase in November, with sales up 0.8%.
Unfilled factory orders advanced for the first time in three months, gaining 4.9% in November. New orders rebounded during the month, jumping 8.1% and slowing the downward trend seen throughout most of 2007.
November sales pumped up by petroleum producers Petroleum and coal product manufacturers reported the most significant jump in sales, increasing by 7.7% or $424 million in November. However, the majority of the increase in sales can be accounted for by a 7.3% jump in petroleum and coal product prices during the month. Excluding petroleum and coal product manufacturers, manufacturing sales increased a more modest 0.3% in November.
Another area reporting improved sales was the primary metal industry. Sales increased 2.3% in November, despite prices falling 1.1%. Most of the strength was located in the central provinces, with Manitoba, Ontario and Quebec all posting increases. Sales by primary metal manufacturers have generally declined since April 2007, as they have been influenced by falling prices, which have decreased for seven consecutive months.
Transportation equipment manufacturers also increased sales in November. Motor vehicle manufacturers saw a 2.0% gain, partly due to rising production of several popular vehicle models which are manufactured in Ontario. Production of aerospace parts and products also gained on the month, rising 1.9% for a fourth consecutive monthly gain.
On the down side, paper product sales sagged 3.0% in November, as manufacturers continued to struggle with falling prices in the industry. Prices for paper products have decreased in eight of the past nine months.
Chemical product sales dropped 1.7% in November, as pharmaceutical and medicine manufactures saw sales slide after a big jump in October.
Provincial gains widely distributed The provincial picture for manufacturing sales in November was generally positive, as seven provinces posted increases. Solid sales were seen across the Western and Central Provinces, while weakness was limited to the coasts.
Across the Prairie provinces, manufacturing sales showed strength in November. Saskatchewan led the pack with a 3.7% jump. Improved performances by food, petroleum and coal products, and machinery manufacturers helped to guide this increase. This was the seventh consecutive increase posted by machinery manufactures in Saskatchewan.
Alberta and Manitoba also reported gains, as sales of manufactured goods increased 2.1%