WASHINGTON: B.C. manufacturing rebounded in December, suggesting an end to the softer range-bound pattern seen since April. Factory shipments reached a seasonally adjusted $3.62 billion during the month on higher wood products and machinery manufacturing gains, up 0.7% from November. However, this fell short of national growth of 1.2% during the month, with shipments 3.2% below the same month in 2014.
Despite recent momentum loss, B.C. manufacturing still outpaced most other provinces in 2015. Growth of 1.7% was in line with Ontario and outpaced a national contraction of 1.5%. Weakness in oil-producing provinces (-12.9%) was the key drag on the national performance. For B.C., a tepid Canadian economy and softer growth in the U.S. and broader economy likely dampened demand, which, combined with excess global supplies of some key wood products, offset the lift from a low Canadian dollar.
Key contributors to B.C. growth included a 9% gain in food products, which accounted for the bulk of overall dollar-volume gain. Machinery and furniture, computers and equipment also posted significant growth. Wood products manufacturing climbed by a mild 1.4%, owing to competitive global conditions.
Annual sales were the highest since 2006 at $43.4 billion – a sixth straight increase – but below inflation-adjusted cycle highs during the early to mid-2000s. Manufacturing is expected to revisit a positive trend as the low Canadian dollar and improved U.S. economic growth and housing market underpin demand for B.C. exports.
