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Trends
Monthly Manufacturing Shipments
The value of goods produced and shipped by Canadian manufacturers increased 1.5% in June to a record $49.9 billion. Over the first six months of 2004, total shipments were 6.1% higher than the first half of last year. Strong shipments growth has been the result of both increased production and price increases, particularly for processed goods.
Manufacturers' Inventory Turns
Manufacturers’ inventory turns climbed to a record 9.9 per year in June. Inventory turns have generally been on the rise since late 2002—the result of strengthening demand coupled with the drive to cut inventory costs.
Manufacturing Shipments By Sector (First half of 2004)
The strongest shipments performance over the past 12 months came from the wood products, primary metals and computer/electronics sectors. Paper, textiles/clothing and automotive products have seen some of the weakest shipments performance over the same period.
Manufacturers' Shipments By Province
Ontario has experienced the weakest manufacturing shipments performance of any province over the past 12 months. The rebound in shipments has been particularly strong in BC, Saskatchewan, Alberta and Newfoundland & Labrador.
New Orders (First half of 2004)
New manufacturing orders in the first half of 2004 were up 9% over the first six months of last year. New orders have increased most rapidly in the aerospace, primary metals, computer/electronic products and machinery sectors.
Commodities: Few Gainers
RBC’s commodity price index fell 1.3% in August, averaging 157.77. On a year-over-year basis, the index is still up over 21%. Of the four sub-indexes, only forestry products managed to squeak out a gain for the month, climbing 2.8%. Energy products and metals prices fell in August, down 2.4% and 2.1%, respectively. The largest drop came in the agricultural products sub-index, as it fell 5.2% for the month, its fourth consecutive monthly decline. RBCÂ’s commodity price index and sub-indexes are denominated in U.S. dollars and weighted by major Canadian commodity exports.
All of the gains in the forestry products sub-index can be attributed to rising lumber prices. Continued demand in the housing construction market in North America has kept lumber prices on the rise. In August, lumber prices rose 4.6% and are they are now up over 35% on a year-over-year basis.
Energy products slipped in August due to lower natural gas prices. More moderate weather conditions have reduced demand for products such as air-conditioners that require natural gas. For the month, natural gas prices fell 8.2%, but they are still up 9.6% year-over-year. Oil prices continued to climb higher, averaging US$44.90 per barrel, up 9.8% for the month.
In the metals sub-index, nickel prices were largely responsible for the declines in August, as prices fell 9.2% for the month. Nickel prices have been quite volatile of late, with inventory levels fluctuating and demand growth unpredictable. Silver prices were up 5.0% in August to average US$6.68 per ounce, while gold prices were virtually unchanged, rising 0.8% to average US$401.74 per ounce.
All of the five components in the agricultural products sub-index were lower in August, led by barley and hogs prices, which fell 8.5% and 8.2%, respectively. Wheat prices fell for the fourth month in a row, down 5.9% to average US$3.10 per bushel. On a year-over-year basis, wheat prices are now down 14.5%.
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