Manufacturing rebounds

July 16, 2009
Winnipeg Free Press
Written by: Murray McNeill

Manitoba posts increase in shipments

There are signs the worst may be over for Manitoba's manufacturing sector.

A senior industry official said Wednesday that some local manufacturers are starting to see a modest increase in orders as customers move to rebuild inventories.

And a handful of them are even shifting into a hiring mode as they scramble to accommodate the increase in orders, Ron Koslowsky, vice-president of the Manitoba division of the Canadian Manufacturers and Exporters, said.

"It's very limited so far," Koslowsky said of the turnaround in fortunes that began taking shape in May. "And it won't be a rapid recovery. It will be slow, and there might still be the odd month where things will take a step back again," he said. "But I think the general trend... will be improvement."

On Wednesday, Statistics Canada released figures showing Manitoba was one of five provinces to post an increase in manufacturing shipments in May. It said Manitoba factories shipped out $1.24 billion worth of goods during the month, which was an increase of 1.3 per cent from April's total of just under $1.23 billion.

The gain helped to partially erase a 4.5 per cent decline in shipments in April. That downturn put a halt to two consecutive months of rising shipments, which had been preceded by five consecutive months of weakening sales.

Manitoba's May rebound was in sharp contrast to the situation at the national level, where Canada's manufacturing sector was hit with a whopping six per cent decline as sales fell to their lowest level in more than a decade at $38.4 billion.

The decline was much worse than most economists expected, and Statistics Canada blamed it mainly on plant shutdowns in the motor vehicle and primary metal industries, along with continued volatility in the aerospace sector.

Although auto production is certain to bounce back when the July numbers are revealed due to the return to production of Chrysler plants -- which were shut down for most of May and June -- economists remain concerned about the weakness of Canada's manufacturing industry.

"Manufacturing looks like it might be one of the last sectors to come out of the recession," economist Benjamin Reitzes said.

"There's weakness across the board. We're not going to see big gains until U.S. demand picks up..."

One local firm that isn't worried about emerging from the recession is Welders Supplies Ltd., which supplies welding equipment to local firms that subcontract work for manufacturers.

"Our sales (this year) have been on track with last year's sales, and last year was a record year for us," president Grant Cockshott said.

-- with files from Canadian Press

murray.mcneill@freepress.mb.ca

Manitoba's and Canada's manufacturing sectors seem to be heading in opposite directions, with Manitoba showing improving numbers in May and Canada turning in a surprisingly grim performance. Manitoba also fared better over the first five months of the year. Here are some of the comparisons:

April to May: Manitoba's manufacturing shipments rose by 1.3 per cent to more than $1.24 billion from just under $1.23 billion in April. Canada's dropped by six per cent to $38.4 billion -- their lowest level since November 1998.

Year-to-date: Manitoba's shipments were down by five per cent to $6.6 billion after the first five months of the year. Canada's decrease was more than triple that, with shipments falling by 18.4 per cent to $250.2 billion.

Industry contrasts: The transportation equipment manufacturing industry was Manitoba's best performer in May, with a 32.2 per cent increase in shipments. ($167.3 million compared to $126.5 million in April). But it was also Canada's worst performer, with a 25.7 per cent decline.

Some other industry numbers: Chemicals manufacturing was another stronger performer for Manitoba (up 11.3 per cent). Primary metal manufacturing was another poor performer for Canada (down nine per cent).

How some of other provinces did: Newfoundland and Labrador had the biggest May increase in shipments, at 26.7 per cent. Quebec had the biggest decline, at 9.1 per cent.

-- Source: Statistics Canada