Manufacturing sales up in December but down for the year on weak energy sector

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Sales of wood products were up 5.5 per cent in December, their highest level since December 2006, according to Statistics Canada.

Alberta’s weakened energy sector continues to pull the country’s manufacturing sales down. For the sixth consecutive month, sales of petroleum and coal products were lower in December than in the previous month, by 2.4 per cent. In all, Alberta’s manufacturing sales contracted by 16 per cent in December and 28.6 per cent for the year, enough to offset gains made in several other sectors and contribute to a net 1.5 per cent drop nationally for the year. This made 2015 the first year in which manufacturing sales fell on an annual basis since 2009. Annual manufacturing sales came to $609.5 billion in 2015, Statistics Canada reports.

Despite the drag from the energy sector, manufacturing sales were up a fairly robust 1.2 per cent for the month of December, coming in at $51.6 billion. It was the second consecutive monthly increase, Statistics Canada said, with increases in seven provinces. According to Thomson Reuters, economists had expected a gain of just 0.7 per cent in December. Sales of motor vehicles and wood products accounted for more than half of the monthly gain.

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Manufacturing sales in Canada. Source: Statistics Canada

Sales of cars and trucks were up 3.6 per cent in December. This was in part due to new models being released by some car makers in the fourth quarter, spurring consumer demand. The motor vehicle industry increases helped give Ontario manufacturers a 0.7 per cent gain in sales. There were also higher sales of industrial machinery in Ontario.

Sales of wood products, meanwhile, reached their highest level since 2006, rising 5.5 per cent in December. Statistics Canada notes that the industry has seen a turnaround in recent years, with greater foreign demand for Canadian lumber, millwork and forestry products.

On an annual basis, sales were up in twelve of the twenty-one industries reported on by Statistics Canada. The largest gain was in transportation equipment, with motor vehicles accounting for half of the dollar increase. Sales of cars and trucks were up 9.1 per cent for the year, while sales of car parts rose 8.9 per cent. Production of aerospace products and parts was up 10.2 per cent.

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