This is the second in a series of discussions of developments over the last 6 months.
How is demand for manufactured goods holding up?
Real gross domestic product (GDP) declined 0.8% in the fourth quarter, weakening progressively each month. This was the sharpest quarterly decline since 1991.
Declines in the production of goods (-2.4%) were widespread as domestic and foreign demand weakened. Except for agriculture, all other goods-producing sectors receded. Manufacturing (-4.3%) led the downturn, experiencing a sixth consecutive quarterly decline.
Business investment in machinery and equipment contracted 7.5% in the fourth quarter. All categories recorded declines, notably automobiles, trucks, and industrial machinery.
From: The StatsCan web site.
Picture’s not much different there.
Manufacturing output decreased by 6.5 per cent in the three months to February 2009 compared with the three months to November 2008 and was 12.2 per cent lower against the same three month period a year ago.
And how about the US?
The Canadian economy contracted at an annualized rate of 3.4% in the fourth quarter, compared with a 6.2% decline in the US economy.
So, all other things being equal (lots of other things aren’t), it’s tough for a low-margin business like metal stamping to stay healthy in such a volume downturn.