After a buoyant first quarter, manufacturers saw their shipments jump 5.0% in April from March to $43.9 billion, Statistics Canada reports.
While this increase was observed in 18 of the 21 major groups, representing 93.3% of total shipments, it came mainly from the motor vehicle sector. Even excluding that industry, April’s shipments were strong, with an increase of 3.3%.
To meet demand, manufacturers built up their inventories in April (+0.3%) an increase that put an end to a series of ten straight monthly declines. As a result of the increase in shipments, the inventory-to-shipment ratio dropped to 1.42, the lowest level since October 2000 and a marked decline from the last peak of 1.56 in October 2001.
April’s increase in shipments (+5.0%) was the strongest since August 1998 (+6.6%), when the partial recovery of the motor vehicle industry after the General Motors strike in the United States was a major factor.
Among the increases observed in April, those that stand out the most were in the motor vehicle and automotive parts industries. April’s shipments corroborate the intentions to raise production that were stated in April’s Business Conditions Survey. In that survey, manufacturers reported that inventory levels had been brought under control, orders were up and it was time to step up production.
The auto industry led the way in the manufacturing sector, recording the largest monthly increase in shipments (+13.8%). Manufacturers of those products more than made up the ground lost throughout 2001. The value of their shipments reached $5.9 billion, the highest level since November 2000.
In the plastics and rubber products industry, the 9.0% increase was mainly the result of the spillover effect from motor vehicle manufacturing. The value of shipments in this industry reached nearly $2 billion, the highest level ever recorded. In the petroleum and coal products industry, the increase in shipments (+6.3%) was mainly attributable to a 4.3% rise in prices. In the chemical products industry (+4.7%), a few major orders shipped in April helped boost shipments to $3.0 billion. Lastly, a fifth consecutive monthly increase was observed in the wood products industry (+3.9%), which benefited from a window of opportunity to export without tariffs until the end of May 2002.
Slightly offsetting the general increase, shipments in the aerospace product and parts industry fell 7.7% in April, completely wiping out the gains observed for this industry in March.