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Manufacturing shipments tumble

Manufacturing shipments tumble

Posted on: 6/18/2018 | Author: ATB Financial's Economics + Research Team

​With the recent aluminum tariffs placed on imports by the US government, brewers in the US are expecting to pay a lot more for aluminum cans. That has brewers worrying about rising prices and the risks of having to pass those price increases onto consumers.

Over the last couple of years, Alberta has become a powerhouse in Canadian craft beer. So how might tariffs on Canadian aluminum affect drink manufacturing in Alberta? It’s still too soon to tell, but recent data show the manufactured drink industry is beginning to wane in our province.

As of April, sales of manufactured drinks (and its combined subsector, tobacco) in Alberta reached $82 million (seasonally adjusted). That was a 5.5 per cent reduction from March.

Manufacturing as a whole has also suffered. In April, Alberta experienced a 5.3 per cent drop in shipments. That month, total sales from Alberta factory floors reached $5.8 billion, it was the first time in six months that sales fell below the $6 billion mark.

The decline in manufacturing shipments was attributed to a 20.5 per cent decline in the sale of petroleum products. This was the direct result of partial shutdowns for maintenance and retooling work at some of the province's refineries.

In the coming months, manufacturing should pick up the momentum it had over the previous six months. The improvement over the next couple of months will be due to a recovery in petroleum manufacturing. It’s still not clear as to how the aluminum tariffs will impact drink manufacturers in Alberta, but one thing is for sure, the tariffs will have a more significant effect on Ontario and Quebec.

Manufacturing shipments, graph

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