Manufacturers seeing ups, downs

July 17, 2008
Winnipeg Free Press
Written by: Murray McNeill

Record-high fuel prices, a pumped-up Canadian dollar and a U.S. economy lurching into recession: They're reshaping Manitoba's manufacturing sector and creating headaches for some, but new opportunities for others.

Statistics Canada figures issued Wednesday provided a snapshot of the changing manufacturing landscape in Manitoba, with companies in the housing, construction and agriculture sectors benefiting the most during the first five months of the year.

The winners include farm machinery manufacturers, producers of fabricated metal products such as steel grain bins, and manufacturers of non-metallic mineral products such as concrete patio slabs and cement building products.

Sectors that saw sales volumes decline included a few surprises, one of the biggest of which was transportation products, which posted a decline in shipments even though Winnipeg transit-bus manufacturer New Flyer Industries has been racking up record-high orders in the last year or so.

All of the ups and downs left Manitoba's manufacturing shipments running 3.1 per cent behind last year's pace after five months -- $6.6 billion compared with $6.8 billion, the StatsCan figures show.

That was despite a strong May in which the province's manufacturers rang up the fourth-biggest shipments increase in the country, at 2.6 per cent ($1.34 billion compared with $1.31 billion). Not only was it fourth best, but it was also just a notch below the national average increase of 2.7 per cent ($51.4 billion compared with $50.1 billion).

Statistics Canada analyst Elton Cryderman said it was Manitoba's best monthly performance since May of last year in both the dollar gain and percentage increase.

Ron Koslowsky, Manitoba vice-president of the Canadian Manufacturers and Exporters (CME), said most of the province's manufacturers have adjusted to a higher-valued dollar -- it's trading at roughly par with the U.S. greenback -- although it's still putting the squeeze on their profit margins.

He said companies like New Flyer Industries and Decor Cabinets, a Morden-based firm that manufacturers high-end kitchen and bathroom cabinets, also continue to churn out impressive sales numbers despite the alarming downturn in their primary export market -- the United States.

And farm equipment manufacturers like Buhler Industries are benefiting from a rebound in grain prices, which has farmers investing in new equipment.

Some of the leading aerospace firms, such as Boeing Canada Technologies, Standard Aero and Bristol Aerospace, also continue to do well despite the turbulence in the world's airline industry, he added.

Barkman Concrete is another Manitoba manufacturing firm that's flying high this year. "We're quite healthy and our sales are very strong," said Winnipeg district manager Paul Koop.

He said some of the Steinbach-based firm's operations are hurting, such as the one that manufactures precast concrete floor systems for hog barns. But that's been offset by a surge in demand for things like pavers, paving slabs and retaining walls for the new-home and home-renovations markets.

"It's the landscaping products that are doing very well for us," he said. "People are making outdoor spaces that are pretty unbelievable. You name it, they're building it."

Another division that manufactures concrete ramps for skate-board parks is also starting to take off, Koop said.

He said while the prospects for the second half of the year look promising, company officials are keeping a close eye on whether the troubles in the United States spill over into this country.

"We haven't really seen that yet... but we're planning for it just the same," he said.

Decor Cabinets president Larry Dyck said he's also keeping his fingers crossed that the Canadian economy doesn't follow the lead of the U.S. economy.

murray.mcneill.@freepress.mb.ca

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