Daily Eonomic Comment - Manufacturing Ticks Higher in February
Posted By: Todd Hirsch Senior Economist, ATB Financial Apr 17, 2012
The level of activity in factories and refineries across Alberta is an important barometer of the overall economy. In February, the province’s manufacturers were churning out product at a fast pace, nearly surpassing a recent record high. But more importantly, they’re making more efficient use of labour.
Alberta’s manufacturing shipments totalled $6.509 billion in February, an increase of 1.8% over January, and 18.4% over the same month in 2011. Nationally, manufacturing shipments were down very slightly (-0.3%) to $49.121 billion, but still up 6.3% from a year ago. Statistics Canada reported this morning lower sales for the motor vehicle assembly, food, and motor vehicle parts industries. These losses were mostly offset by increases in aerospace product and parts, non-metallic mineral products, and petroleum and coal products industries.
Alberta’s gain was largely due to a strong 6.5% uptick in petroleum refining. The output from upgraders and refineries in the province is counted as a manufactured product, but because these facilities can occasionally go ‘off-line’ for repair and maintenance, overall manufacturing levels can fluctuate.
Manufacturers in Alberta appear to be growing more efficient, especially when it comes to labour. While shipments are up 18%, manufacturing employment in the province is down by more than 12% from a year ago. While that sounds like bad news (especially for workers in manufacturing), it is actually a positive economic sign. Manufacturers are investing in better machinery and equipment, and becoming more productive. Basically, they’re producing more output with fewer workers.