MRO Magazine

Manufacturing recovers from supply disruptions in the second quarter

Ottawa, ON -- The composite leading index compiled by Statistics Canada was little changed in August 2011, for the third month in a row. Of the 10 components, six continued to expand in August, the same number as in July. The weakness in the...


Ottawa, ON — The composite leading index compiled by Statistics Canada was little changed in August 2011, for the third month in a row. Of the 10 components, six continued to expand in August, the same number as in July. The weakness in the index was concentrated in the housing index and the stock market, both of which fell more than the month before.

The unsmoothed version of the index showed a slight improvement, with a 0.6% increase in August, matching its gain in July as a recovery of manufacturing from supply disruptions in the second quarter outweighed losses in the stock market and in housing.

Manufacturing remained mixed. New orders rose 3.4% for a second straight month, as manufacturers began to recover from a series of supply disruptions in autos, petroleum and metal refining that had hampered second-quarter output. However, the trend of shipments has not yet begun to recover, and the ratio of sales to stocks fell for a third straight month.

The average workweek continued to fall, although factory employment has been stable in recent months. This partly reflects a decision by firms to keep their workers on staff during the supply disruptions, but at reduced hours.

Advertisment

Most of the 0.7% drop in the housing index originated in lower existing home sales. Housing starts levelled off, after recovering over the previous five months. Furniture and appliance sales remained robust, rising 1.1%. Spending on other durable goods rose 1.6%, its largest monthly increase during the recovery, partly as shortages of Japanese models began to ease.