Alberta manufacturing sales plunge 13% in year as most provinces see upswing

A Statistics Canada report paints a stark contrast between a robust national economy and one in Alberta that continues to shrink because of the collapse of the oil and gas sector.

StatsCan says sales rose in 16 of 21 industries across Canada while Alberta saw 4% drop last month

Manufacturing sales in Alberta fell for the sixth time in seven months, mostly because of lower sales of petroleum and coal products, Statistics Canada says. (Norm Betts/Bloomberg)

A Statistics Canada report paints a stark contrast between a robust national economy and one in Alberta that continues to shrink because of the collapse of the oil and gas sector.

Manufacturing sales Canada-wide rose 2.3 per cent in January to $53 billion — an all-time high, the report released Wednesday says.

Sales are up 5.6 per cent since last January, driven mostly by higher sales of motor vehicles, vehicle parts, and food. Sales rose in 16 out of 21 industries. 

Meanwhile, manufacturing sales in Alberta were down almost four per cent from December to January. Year-over-year sales plummeted 13.2 per cent.

"Sales in Alberta fell for the sixth time in seven months, largely as a result of lower sales of petroleum and coal products, and fabricated metal products," the report said.

More pain ahead

Manufacturing in Alberta is largely driven by the oil and gas industry, says ATB Financial's chief economist Todd Hirsch.

"Eighty per cent or so of our manufacturing in this province is related in one way or another to that petroleum sector, whereas the rest of the Canadian economy, especially around automotives and auto parts, is doing quite well," said Hirsch.

The sale of petroleum and coal products in particular fell almost six per cent, the Statistics Canada report said.

"Those manufacturers [are] not getting as many orders coming in, their order books are drying up, eventually they're going to be forced to lay people off," Hirsch said.

"We've been seeing this already for about a year and I think we're going to continue to see some layoffs in that manufacturing sector going forward," he added.

Last year, manufacturing sales in Alberta dropped almost 16 per cent, according to Statistics Canada.

The petroleum and coal product industry was the largest manufacturing industry in Alberta from January 2009 to September 2015.

In October 2015, it dropped to second place, behind the food industry.

And last month it fell to third place, behind both food and chemicals, Statistics Canada says.