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Trends
Manufacturing shipments
July's manufacturing shipments climbed 0.5% to a record $50.2 billion, largely thanks to price increases in the petroleum, chemicals, wood and primary metals industries. Shipments over the first seven months of 2004 were 6.5% higher than over the same period last year. Saskatchewan saw the strongest growth; Ontario the weakest.
Consumer inflation rates acroos Canada
Consumer prices in August were 1.9% higher on a year-over-year basis across Canada. Inflation rates varied from a low of 1.5% in Ontario to a high of 2.6% in Manitoba.
Merchandise trade performance: region
Canadian merchandise exports were 5.2% higher over the first seven months of 2004 than during the same period last year. Exports to the US grew by only 3.2% while those to developing countries rose by more than 21 per cent. Total imports rose by only 2.2% over the year, coming from countries outside the US, Japan and the European Union.
Merchandise trade performance/commodities
Canadian exports of agricultural goods, forestry products and industrial materials have risen sharply over the past year as a result of both higher volumes and significant price increases. Higher prices have also been responsible for the surge in energy and industrial materials imports.
Year-over-year change in employment
Employment in Canada fell in August by 7,000, but was still 317,600 above employment levels during August 2003. Sectors experiencing the most rapid job growth over the past year are health care, financial services and construction. Manufacturing employment rose by 10,000.
Capacity utilization rates: Q2 2004
Capacity utilization in Canada's manufacturing sector reached its highest level in more than four years between April and June. Manufacturers operated at 86.6% capacity in the second quarter compared with 85% during the first three months of the year. Growth was widespread, and the capacity utilization rate for seven of the 21 industry groups in the sector was above 90 per cent.
Commodities: Oil's in Charge
RBC's commodity price index shot up 10.9% in October, averaging 169.26. Year-over-year, the index is up more than 34%, reaching its highest level since we began tracking the index more than 10 years ago. Most of the gains this month can be attributed to the high-flying energy products sub-index where oil prices have been on a tear throughout October. The energy products sub-index was up 21.2% for the month and is up more than 49% from a year ago. The metals sub-index was up 5.4%, while agricultural and forestry products both declined, dropping 2.3% and 11.7%, respectively. RBC's commodity price index and sub-indexes are denominated in U.S. dollars and weighted by major Canadian commodity exports.
In the energy products sub-index, oil prices continued their climb to record levels, averaging US$53.09 per barrel. On a year-over-year basis, oil prices are up more than 74% due to a number of factors, including geopolitical uncertainties, capacity constraints, strong international growth and speculative activity.
Most of the rise in the metals sub-index in October came from gold and silver prices, which were up 3.7% and 11.8%, respectively. Gold reached US$421.05 per ounce, its highest monthly average since the late 1980s. Silver averaged US$7.13 per ounce and is up more than 42% on a year-over-year basis. Nickel and zinc prices also helped the sub-index rise higher in October, up 6.9% and 8.8%, respectively.
Agricultural products prices fell in October, largely due to canola prices, which plummeted 10.2% for the month and are now down more than 20% from a year ago. Canola prices have declined for seven consecutive months as an improved oilseed crop and soybean harvest this season have eased pricing pressures. Wheat and hogs prices added to the declines - they were off 3.2% and 1.6% respectively.
A sharp decline in forestry products can once again be attributed to falling lumber prices, which plunged another 18.7% in October. Lumber prices have been on a sharp decline for two consecutive months as demand in the U.S. residential construction market has moderated somewhat this fall.
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