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Manufacturing Sales Up in Canada in February
April 16, 2008
Source: Statistics Canada, www.statcan.ca
Sales of goods manufactured rose 1.6% to $50.1 billion in February, due in part to a gradual bounce-back by Canada's motor vehicle industry.
This marked the second successive increase in manufacturing sales, as manufacturers continued to make up ground lost after a tough December (-3.7%).
The volume of goods manufactured also improved in February. At 2002 prices, manufacturing sales rose 2.7% to $49.0 billion, following a 2.2% increase in January. Again, contributing to the boost in volumes produced were several automotive manufacturers who continued to ramp up production during the month.
Despite the consecutive increases, manufacturing sales were well off levels of one year ago as the sector coped with an array of economic concerns. February's sales remained 2.3% below levels of the same month in 2007, and significantly below March 2007's peak of $53.1 billion (-5.6%).
Sales levels in recent months have proven tenuous for many manufacturers. The economy of Canada's largest trading partner, the United States, continued to slow due in part to their ongoing credit crunch and housing crisis. Meanwhile, input costs continued to rise, due in part to soaring energy prices, while the sustained strength of the Canadian dollar eroded manufacturers' abilities to be competitive in the global market.
As a result, manufacturers continued to layoff workers. According to the recent release of the Labour Force Survey for March, manufacturers have cut thousands of jobs from their payrolls, including 23,700 in February and another 9,400 in March. Auto assembly plants ramp up production The majority of manufacturing industries (13 of 21) posted higher sales in February, accounting for a healthy 84% of total sales.
While nondurable goods industries saw a 0.4% increase in sales, manufacturers of big-ticket, durable goods dominated with a 2.6% boost to $26.2 billion. This strength was due in large part to advances in motor vehicle manufacturing.
Following extensive production slowdowns and shutdowns in December and into January for the purposes of re-tooling and inventory control, manufacturing sales of motor vehicles jumped 11.7% to $4.3 billion in February. This followed a 3.9% gain in January, and a deep cut of 27.3% in December to close 2007.
Notwithstanding the scale of February's rebound, manufacturing sales of motor vehicles remained well off levels of one year ago (-20.5%). Recent reports of deteriorating car and light truck sales in the United States, where the bulk of Canadian-made vehicles are shipped, indicate uncertain times ahead for the industry.
Production of aerospace products and parts surged 11.6% to $1.5 billion in February, the first increase since November. A backlog of orders for both civilian and defence aircraft and parts should contribute to some strong months ahead.
Excluding the transportation equipment sector, which includes motor vehicles and aerospace industries, manufacturing sales rose a more moderate 0.4% over the month.
Fuelled by robust global demand and prices, manufacturing sales of primary metals advanced 1.4% to $4.3 billion, the third increase in four months.
A 4.9% decline in the electrical equipment, appliance and components industry slightly counterbalanced the overall rise in total manufacturing sales. This small but diversified industry manufactures such commodities as kitchen appliances and lighting fixtures, to communication and energy wire, and cables. Sales increase in seven provinces Manufacturing sales increased in seven provinces during February, with Ontario, New Brunswick and Quebec