Saskatchewan’s slump in manufacturing continues
Saskatchewan manufacturing sales fell by eight per cent to $1.12 billion in February from $1.2 billion in January — the second-largest monthly drop of any province, Statistics Canada reported Friday.
Year over year, provincial manufacturing sales declined by 5.4 per cent from $1.18 billion in February 2015 compared with the national average increase of 3.9 per cent during the same period, the federal agency said.
While StatsCan doesn’t provide a detailed breakdown of provincial manufacturing sales (for competitive reasons), plunging oil prices plus slow machinery and fabricated metal sales would appear to be responsible for most of the decline.
In January, sales of non-durable goods like fertilizers and agricultural chemicals were up 1.8 per cent year over year to $949 million, despite a 15 per cent decrease in “other” non-durable goods, which includes petroleum products. But sales of durable goods, which include machinery manufacturing and fabricated metal products, were down 10.4 per cent to $229 million during the same period.
Regina-Lewvan MP Erin Weir said Saskatchewan’s slumping manufacturing sector shows the province needs to diversify the economy from a primary producer of commodities, as well as the need for fair trade laws and access to federal government contracts.
“We need the federal government to push for more domestic processing of our natural resources, implement balanced trade policies to prevent the dumping of offshore steel into the Canadian market and ensure local manufacturers (get) fair access to federal procurement contracts,” Weir said in a commentary Friday.
Nationally, manufacturing sales decreased 3.3 per cent to $51.2 billion in February, following three months of consecutive gains, StatsCan said.
Sales were down in 16 of 21 industries, representing 74 per cent of the manufacturing sector. Motor vehicles and petroleum and coal products were responsible for over two-thirds of the decrease. Motor vehicle parts, aerospace products and parts and machinery also contributed to the decline.
In constant or inflation-adjusted dollars, sales declined two per cent, reflecting a lower volume of goods sold, the report said.
Sales of motor vehicles fell 10.5 per cent in February. Despite the decrease, sales for the industry are at the highest level since March 2007 as manufacturers shifted production toward higher-end or more expensive vehicles, the report said.
Sales of petroleum and coal products fell 12.6 per cent in February, a ninth consecutive decrease. Prices declined for the eighth consecutive month, down 4.3 per cent on a monthly basis.
Year over year, the industry’s weaker performance has reflected lower prices, the agency said. Operating profits for petroleum and coal products fell 30.6 per cent in the fourth quarter, the second consecutive quarterly decline.
The motor vehicle parts industry declined 2.9 per cent following five consecutive increases, while sales of aerospace products and parts fell four per cent, a second consecutive decline.
Lower sales of machinery also contributed to the overall decrease. Sales fell 2.7 per cent for the industry and are at the lowest level since April 2011. Machinery manufacturers tied to the oil and gas extraction sector have reported lower demand over the last year and some establishments have closed, StatsCan said.
Sales declined in seven provinces in February with Ontario, Quebec and New Brunswick posting the largest decreases.