Manufacturing shipments tumbled 1.8% in June to $48.6 billion, the largest decline since January, Statistics Canada reported today.

Despite three straight monthly decreases, however, second-quarter shipments still managed to gain 0.7% over first-quarter shipments, due to high shipment levels early in the quarter after a particularly strong March.

Manufacturing shipments were up 0.1% during the first six months of this year over the first six months of 2006.

Using constant dollars, which take price fluctuations into account, the volume of manufacturing shipments dropped 1.7% in June to $44.3 billion.

In addition to the sharp decline in the transportation equipment industry, many other sectors also reported a drop in shipments — 13 of 21 manufacturing industries decreased, representing about 75% of total shipments.

Excluding motor vehicles and parts, shipments in June were notably stronger, losing only 0.5%.

Shipment decreases were led once again by durable goods manufacturers, whose shipments dropped 3.2%, a third straight monthly decrease. Transportation equipment, primary metals and machinery manufacturers were the primary contributors to the slump. Shipments of non-durable goods also fell, slipping 0.3% to $22.9 billion. Price-driven declines in petroleum and pulp and paper helped to fuel this reduction.

Unfilled factory orders, a proxy for future shipment performance, were strong once again, increasing 2% in June to $49.8 billion. New orders dipped 1% to $49.6 billion.