31F0026MIE1995001

	Destinations of manufacturing shipments 1984-1993 Manufacturing, construction and energy division
	Étienne Saint-Pierre

INTRODUCTION

A comparison of data for 1984, 1990 and 1993 brings to light significant changes in the destinations of manufacturing shipments. These three years cover a decade characterized by increased trade liberalization and growing market globalization, both of which had a highly visible impact on manufacturing exports. Interprovincial trade also changed. Some manufactured goods became less dependent on markets in their province of origin. The data from the Annual Survey of Manufactures show that they were increasingly shipped elsewhere in Canada.

The manufacturing sector plays a major role in the Canadian economy, with $310 billion in shipments recorded for this sector in 1993. Changes in the destinations of shipments thus directly affected the economies of Canada and the provinces.

This study will examine, first, exports, then interprovincial trade, and finally intraprovincial trade.

1    EXPORTS

In 1993, total manufacturing industry shipments outside Canada totalled more than $115 billion or 37% of the total value of shipments by Canadian manufacturers that year. The share was 31% in 1990 and 27% in 1984. Over ten years, the share of the value of export shipments rose by 10 percentage points, thereby demonstrating the growing importance of foreign markets for sales of Canadian manufacturing products.

The ten Canadian provinces recorded an increased share of manufacturing shipments intended for export between 1990 and 1993. In contrast, Newfoundland and Prince Edward Island had a higher percentage of export shipments in 1984 than in 1993. Nova Scotia had the largest percentage increase of export shipments, 16 percentage points between 1984 and 1993 (Chart 1. Percentage value of export manufacturing shipments, Canada, provinces, 1984, 1990, 1993).

British Columbia and Newfoundland had the highest share of export manufacturing shipments in 1993 (43%) whereas for the period under review, shipments from the Prairie provinces were least likely to be exported. The relatively longer distances separating these provinces from the main sea routes and large urban centres of the Northeast and Western Coast of the United States may provide a partial explanation of this. Major exporting industries establish local facilities to be able to have access to their markets at the lowest possible cost.

Between 1984 and 1993, just over 50% of the total value of export manufacturing shipments came from two main groups. Indeed, over the same period, an average of 41% of exports from the manufacturing sector came from the transportation equipment industries and 13% from the paper and allied products industries.

The 22 major groups increased the percentage of shipments outside the country in 1993 compared to 1984 and 1990. With reference to 4-digit SIC industries, more than 185 of them exported a larger share of their shipments in 1993 than in 1984. Approximately 25 industries lowered their share during this period. The industries most closely linked to external markets over this period were the transportation equipment, paper and allied products and rubber products industries. The clothing, food and printing, publishing and allied industries were heavily dependent on domestic demand (Table 1. Percentage of export shipments by major group, 1984, 1990, 1993).

The rubber products and primary textile industries had the highest increased share of export shipments, 28 and 22 percentage points respectively, between 1984 and 1993.

With regard to industries (4-digit SIC), it is also possible to see that the distribution of industries according to the percentage of export manufacturing shipments changed over the three years under review. Generally, the number of industries exporting less that 20% of the value of their shipments decreased and the number of industries exporting over 20% increased (Chart 2. Distribution of industries (4-digit SIC) according to the percentage of exports shipments, 1984, 1990, 1993).

2    INTERPROVINCIAL TRADE

Interprovincial trade also changed as the statistics in this section show. Just as the propensity to export manufactured goods increased for the vast majority of provinces and major groups, so a similar phenomenon may be observed with respect to interprovincial trade: a greater share of domestic shipments went to a province other than the one in which the goods were manufactured.

Chart 3. Share of shipments destined for the rest of Canada (excluding exports), provinces of origin, 1984, 1990, 1993 shows that all provinces, with the exception of Newfoundland and British Columbia, increased their share of domestic shipments to other parts of Canada. While this share remained stable for Quebec and Ontario, it went from 47 to 62% for New Brunswick between 1984 and 1993. New Brunswick also had the highest share. Conversely, Newfoundland's "exports" to other provinces declined by 11 percentage points over the same period. Newfoundland industries went against the trend of other Canadian provinces and increased their propensity to ship within the province over this period.

The previous paragraph discusses "exports" to other provinces. What can it tell us about "imports" from other provinces? Because manufacturing industries are largely concentrated in Quebec and Ontario, it is not surprising to note that these two provinces receive the lowest percentage of shipments from other provinces. Indeed, in 1993, only 17% of manufacturing shipments received by Ontario came from other provinces. For Quebec, this figure was 30%. On the other end of the scale, the Atlantic provinces (for example, 76% for Prince Edward Island and 68% for Newfoundland) and Saskatchewan received the highest percentage of shipments from the rest of Canada.

The "relative balance" of interprovincial shipments enables us to summarize Canadian "export" and "import" manufacturing shipments. This is done by dividing the excess or deficit of interprovincial shipments by the sum of all the shipments from one province to the rest of Canada and all the shipments this province received from the rest of Canada. During the period between 1984 and 1993, only Quebec and Ontario had a positive relative balance (Table 2. Relative balance, provinces, 1984, 1990, 199); in other words, shipments to the rest of Canada for each of these provinces were greater than shipments received from other provinces. The large number of industries in the two provinces ensures that they find it relatively easier to maintain self-sufficiency in manufactured goods than the other provinces and that they supply the other provinces with many manufactured goods.

The relative balance deficit decreased for the three Prairie provinces over the period but Prince Edward Island and New Brunswick had the most dramatic declines of over 20 percentage points. During the same period, this indicator was stable for Quebec and Ontario while the relative balance deficit increased for Newfoundland, Nova Scotia and British Columbia. It must be noted that negative balances of interprovincial shipments of manufacturing goods may be counterbalanced by positive balances in natural resources and services as well as by federal government transfers to disadvantaged provinces and individuals.

With respect to the major groups, we can also see that the percentage of total shipments to markets within the province of origin decreased. In 1984, more than half the total shipments for 16 of the 22 major groups were within the province of origin. This figure was 13 in 1990 and 10 in 1993. Only two major groups saw their in-province shipments increase during the period (clothing industries and non-metallic mineral products). Thus the markets in which the vast majority of manufacturing products were disposed tended to get further away from their place of manufacture.

In 1993, the highest proportion (over 70%) of in-province shipments were made by the beverage industries, the printing, publishing and allied industries and the non-metallic mineral products industries. At the other extreme, the tobacco products industries (24%), rubber products industries (26%) and transportation equipment industries (18%) had a smaller share of the value of in-province shipments.

CONCLUSION

Canadian manufacturers expanded markets in which they sold their products between 1984 and 1993. These tendancies are observed for the majority of provinces and industries. The strong American demand and the weakness of the Canadian dollar in relation to the American dollar, should contribute to increase the propensity of Canadian manufacturers to export their products.

This article was written by Étienne Saint-Pierre.  Étienne is a Statistics Canada economist in the Manufacturing, Construction and Energy Division.

Further information on Canadian manufacturing can be found in the publication, Products Shipped by Canadian Manufacturers (Cat. 31-211-XPB).  This publication is available annually for $67 per issue in Canada and for $67 U.S.   outside Canada.   Order this publication by telephone:  1-800-267-6677, by fax: 1-800-889-9734, or by Internet: Order.  For more information about manufacturing data or time-series call the Disclosure and Dissemination Unit, Manufacturing, Construction and Energy Division at (613) 951-9497 or by Internet:  manufact@statcan.gc.ca.