Tuesday, May 17, 2005

Factory shipments down again

FACTORY shipments fell for the second consecutive month in March, while manufacturers continued to stock up on inventories.

Shipments fell 1.8% to just under $50.0 billion following a 0.6% decline in February. The back-to-back decreases wiped out the substantial gain January.

Again, it was the transportation equipment sector that put the brakes on shipments. However, the weakness in March was more widespread. Sixteen of 21 manufacturing industries, accounting for 80% of total shipments, reported declines.

Despite the slump in shipments, manufacturers continued to receive new contracts. This boosted the backlog of unfilled orders by 2.1% to $39.0 billion, a two-year high.

On a quarterly basis, shipments during the first three months of 2005 were up 5.9% compared to the same period last year.

The high cost of gasoline and a rise in borrowing costs may have contributed to a sharp drop in shipments of motor vehicles and parts. Motor vehicle manufacturers cut shipments a further 7.3% following a decline in February. The parts industry fell a sharp 8.7%.

Crude oil prices

Market angst over possible oil supply shortages in the United States sent crude prices to record levels by mid-March. As a result, price-inflated shipments of petroleum hit $4.3 billion, a 7.3% jump.

Aerospace products and parts production fell 16.8%. However, orders for aircraft and parts have been picking up in recent months.

Six provinces and the territories posted declines in March. Gains in New Brunswick and Alberta, resulting from strength in resource-based industries, partly offset big drops among factories in Ontario and Quebec.

For more information, contact Russell Kowaluk (613-951-0600), Manufacturing, Construction and Energy Division.

  Print article

© 2004, 2005 Statistics Canada.