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Mario Toneguzzi is a Troy Media reporter based in CalgaryAlberta manufacturing sales are recovering from a bad year, even as national national manufacturing sales are declining.

Manufacturing sales in Alberta increased 1.6 per cent to $6.3 billion in October, following a 2.8 per cent decline in September. The gain was mostly attributable to higher sales in the food (+8.9 per cent) and chemical (+3.2 per cent) industries, reported Statistics Canada.

The Edmonton census metropolitan area saw growth of 5.4 per cent to $3.3 billion while the Calgary region was up 5.1 per cent to $1.1 billion.

On an annual basis, however, sales in Alberta fell by 8.8 per cent and were down by 10.3 per cent in Edmonton. However, they rose by 3.4 per cent in Calgary.

Nationally, manufacturing sales declined 0.7 per cent to $57.1 billion in October, the second consecutive monthly decrease.

“In the petroleum and coal product industry, sales rose 6.2 per cent to $6.4 billion in October, following four consecutive monthly declines,” the federal agency reported. “Several major refineries ramped up production following shutdowns and maintenance in September. The production increase following the shutdowns was reflected in higher capacity utilization rates for the industry, which rose from 81.9 per cent in September to 86.8 per cent in October. In constant dollars, sales in the industry were up 5.2 per cent.”

On an annual basis, sales dropped by 2.1 per cent in Canada.

In a commentary note, Omar Abdelrahman, Economist with TD Economics, said October’s disappointing results nationally should not come as a major surprise, citing the impact of a strike by the UAW in the U.S.

“Digging beneath the headline, manufacturing sales were flat excluding auto sales, and a decent number of industries and provinces still saw sales increase in October. That said, a second consecutive decline in shipments doesn’t bode well for real GDP growth in Q4,” he wrote.

“We have noted before that Canadian manufacturing shipments and exports face a cloudy outlook given the global backdrop. The recent de-escalation of U.S.-China trade tensions should help support an uptick in sentiment, but manufacturing PMIs globally are still in contractionary territory. Uncertainty will continue to cloud the outlook until further details and assurances are provided.”

Alberta has some more good news, though.

In another report, StatsCan noted that Alberta had the highest percentage annual decline of job vacancies in Canada in the third quarter. Vacancies decreased by 10 per cent to 52,890 in the third quarter of this year as decreases were spread across the province.

StatsCan said a little less than half of the decrease was accounted for by mining, quarrying, oil and gas extraction and by construction—both sectors where payroll employment declined over the period. “At the same time, the health care and social assistance sector, which saw an increase in payroll employment, represented a further one-third of the reduction in total vacancies,” it said.

The job vacancy rate fell by 0.3 percentage points from a year ago to 2.6 per cent.

And a new Provincial Economic Forecast released Tuesday by TD Economics follows what other financial institutions have been saying recently that Alberta will rebound this year and next with positive economic growth. TD is forecasting growth of 1.8 per cent in 2020 and then 2.0 per cent in 2021 for the province.

“Notwithstanding the challenging economic backdrop, there are some bright spots,” the TD report stated. “Prospects for petrochemical manufacturing are favourable, as construction continues on two large facilities. After a significant setback last year, housing markets have been gradually turning the corner, with modest gains in sales and prices anticipated over the next few years.

“Longer-term, Alberta’s growth prospects remain comparatively bright, underpinned in part by its young and growing population,” said the report.

© Calgary’s Business


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