Daily Economic Comment - Manufacturing Rides the $100 Oil Highway
Posted By: Todd Hirsch, Senior Economist, ATB Financial Jan 19, 2012
Across North America, a nascent recovery in manufacturing is raising some hopes fo the general economy returning to health. Factory floors and refineries in Alberta were doing more than their part to boost shipments towards the end of last year.
Alberta manufacturers shipped $6.4 billion worth of finished product in November, a whopping 5.9% jump from the month previous. November’s level; falls just short of the record high reached in July 2008. Over the first 11 months of the year, shipments in 2011 are 18% higher than the same period of 2010. Nation-wide, manufacturing sales ticked higher by 2.0% in November to $49.6 billion, the fourth increase in five months. The gains reflected a rise in shipments of machinery, petroleum and coal products, and motor vehicles and parts.
Mirroring the national picture, Alberta’s manufacturing was also boosted by machinery and petroleum products. But unlike central Canada’s manufacturing which leans heavily towards consumer goods-machinery manufacturing in Alberta provides inputs for the energy sector, steel and pipe, specialized equipment for the oil sands, and refined petroleum such as gasoline dominate.
Alberta’s manufacturing sector has benefitted tremendously from rising oil prices over the past year. As long as oil prices hang in the current range of around $US 100 per barrel, 2012 promises to be a fairly busy year for refineries and factory floors in the province.