Manufacturing sales in Alberta down 15.9%, StatsCan reports
Sales on upswing at end of 2015 in 7 other provinces
Sales of products manufactured in Alberta dropped 15.9 per cent from the end of 2014 to the end of 2015, according to the latest figures from Statistics Canada.
On a month-to-month basis — from November to December last year — sales dipped 2.4 per cent, mostly because of decreased activity in the petroleum and coal sectors.
- MORE ECONOMIC NEWS | Detached house construction plunges 37% as Calgary market shifts toward multi-family
- MORE ECONOMIC NEWS | New mortgage rules could hit Calgary market, and reduce temptation of debt
The national picture was much brighter, with sales on the uptick in the last month of 2015 in seven provinces.
"In December, sales increased in the motor vehicle and wood products industries, representing over half of the national gain," Statistics Canada said in a release.
"Chemical products, miscellaneous products, ship and boat building, as well as other transportation equipment also posted higher sales, which accounted for almost one-third of the overall increase."
However, from 2014 to 2015, national manufacturing sales declined 1.5 per cent, the first annual dip since 2009 — a statistic skewed by Alberta's economic woes.
"The petroleum and coal products industry was mainly responsible for the downturn in 2015," Statistics Canada said.
"Sales in the industry fell 28.6 per cent, reflecting a 22.3 per cent drop in the average price of refined petroleum products. Excluding petroleum and coal products, manufacturing sales increased 2.6 per cent in 2015.
Effect of oil output freeze uncertain
An agreement announced Tuesday among Russia and OPEC members Saudi Arabia, Venezuela and Qatar to freeze oil production levels could boost the slumping price of oil, but only if the agreement is adhered to, said Jason Tuvey, a Middle East economist at Capital Economics
But according to Jamie Webster, senior director of oil markets at Washington D.C.-based consulting firm IHS, freezing production rates will have little effect on price at this point.
"The market is still oversupplied by about 1.2 million barrels a day. So, just freezing it there, particularly when nobody was really expecting them to grow anyways — that doesn't get us back to a balance," he said.