Manufacturers regained some lost ground in March, as shipments rose 1.7% following February’s 3.9% slide, the latest Statistics Canada report indicates.
Increases in the motor vehicle (+5.3%) and computer and electronic products (+5.9%) industries boosted shipments to $43.7 billion for the month. Despite March’s increases, shipments remained 5.2% below the peak of $46.1 billion seen in October 2000.
Shipments rose in seven provinces in March; higher values were reported in 15 of 21 industries, accounting for 85% of total manufacturing shipments.
Despite the improvement in March, however, the level of shipments may continue to drop off.
"Notwithstanding March’s increase, the manufacturing sector has faltered significantly in recent months. Market conditions as of late include a weaker economy in the United States, higher inventory levels and a general sense of economic pessimism. As a result, the Canadian manufacturing sector has seen contract cancellations, production slowdowns and layoffs since the autumn of 2000," Statistics Canada reports.
March inventory levels were unchanged at $65.3 billion, after gradual increases over the first two months of 2001. Coupled with the slight rebound in shipments, the inventories-to-shipments ratio recovered to 1.49, compared with February’s jump to 1.52. Unfilled orders resumed a downward shift for the third time in four months, decreasing 1.6%. New orders also lost most of February’s gain, declining 3.5%.
According to the April 2001 Business Conditions Survey for manufacturing, fewer manufacturers (27%) indicated that they expected to decrease production levels further in the second quarter of 2001, while 58% said their production would remain constant. Although they were less concerned with finished product inventory levels, manufacturers expressed some unease about their level of orders, and indicated that reduced employment was a possibility.
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