Tuesday, April 20, 2004

Factory shipments highest in six months

Manufacturing shipments rose for only the third time in six months in February, but much of the gain was due to spiralling industrial prices.

Factories shipped almost $45.8 billion in goods, the highest level since September last year. This was a 0.8% increase from January.

Soaring demand for lumber and raw steel has contributed to significant price gains in recent months. Steel prices have tripled in just a year.

The ongoing construction boom in Canada and the United States continued to generate heavy demand for wood products, and contributed to recent price gains. Wood product prices have soared almost 10% since December.

In addition, the value of petroleum shipments has surged in the wake of rising prices for crude oil, partly caused by strong global demand and a possible cut in production quotas by the Organization of Petroleum Exporting Countries.

Shipments of petroleum and coal products jumped 3.9% in February to their highest level since March 2003. Similarly, shipments of wood products rose 4.1% to their highest level in three months.

Dollar eases back

The Canadian dollar eased back somewhat against its American counterpart following decade-high levels in January. More than half of Canadian manufactured products are destined for markets abroad, and although manufacturers appear to be holding their own, the exchange rate is still a concern.

Inventories fell for the ninth time in the last 10 months, while new orders dropped 0.8%.

Six provinces reported higher shipments in February, led by Alberta where gains were concentrated in computer manufacturing and wood products.

For more information, contact Daniela Ravindra (613-951-3514), Manufacturing, Construction and Energy Division.

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© 2004, Statistics Canada.