The value of Canadian motor vehicle assembly shipments rose in Q1 this year to $13.66b, an increase of 6.6 percent from Q1 2011 shipments ($12.81b). Other sub-sectors showed double digit performance improvements as well, including motor vehicle parts and accessories (+17.0% YTD) and metalworking manufacturing (+25.9% YTD). It’s clear from these gains that the manufacturing backbone of Canada’s auto industry is enjoying a cyclical upturn as the North American automotive industry recovery gathers momentum.
Production in these sectors has ramped up with generally impressive employment gains; motor vehicle assembly jobs have been added every month thus far in 2012, growing from 51,400 jobs in January to 68,000 jobs in March (+21.2% YTD). Metalworking manufacturing employment has ballooned since Q4 2011, with present employment tracking an astounding 40.8 percent above Q1 2011 results. A mild decline in the motor vehicle parts and accessories employment (-3.6% YTD) seems out of step with the subsector’s strong output growth noted above; fallout from recent plant closures may be to blame for this discrepancy, as is the lagging nature of employment as a measure of demand response.
Following useful gains during the second half of 2011, employment in the automobile dealer sub-sector (NAICS 4411) rose 9.4 percent YTD. This reflects the renewed vibrancy seen in the new vehicle sales sector since Q4 2011, as dealers have added jobs to pace increased consumer demand.
Unfortunately, declines were witnessed elsewhere in the auto industry’s retail sub-sectors. Wholesale motor vehicles (-5.2% YTD), wholesale part and accessories (-12.7% YTD), gasoline stations (-7.7% YTD), automotive equipment rental/leasing (-45.8% YTD) and automotive maintenance/repair (-5.1% YTD) were unable to match the manufacturing sector’s solid results.
We are presently in the midst of a long due cyclical upswing. Relative to the tepid performances seen during the first months of 2011, Canada’s auto industry is once again on a growth trajectory.
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