It was a tough summer for manufacturers but they are more upbeat about fourth quarter production and employment prospects, says Statistics Canada in a survey report released this morning. According to the Monthly Survey of Manufacturing, unfilled orders in August stood at slightly over $38.4 billion, down 19.2% from August 2002 and the lowest level since October 1997.

In October, says Statscan, 34% of manufacturers stated they would increase production in the fourth quarter, while 16% expected to decrease production, leaving the balance of opinion at +18. This represents a 17-point rise from July and is the highest positive balance since April 2000.

With 14% of manufacturers stating a higher than normal backlog and 25% expressing a lower than normal backlog, the balance of opinion concerning the current level of unfilled orders stood at -11 in October. Producers in the primary metal, transportation equipment, fabricated metal product and wood product industries contributed to the 18 point improvement in the balance.

The voluntary survey, to which almost 4,000 manufacturers responded, requests opinions on production impediments, finished product inventory levels, new and unfilled order levels, production and employment prospects in the coming three months.

In another report, StatsCan says that builders took out another monthly record in residential building permits in September, as the demand for single- and multi-family dwellings maintained its torrid pace. The value of housing permits rose 10% to a record $2.9 billion, surpassing the previous record of $2.86 billion set in July. The value of building permits, an early indicator of construction activity, points to a busy winter for residential builders.

Meanwhile, on the earnings front we will hear from CSI Wireless, CanWest Global Communications Corp., auto parts company Decoma International, Dynatek Corp., Industrial Alliance Life Insurance Co., Mediagrif Interactive Technologies, St. Lawrence Cement, Talisman Energy and technology investment firm Westaim Corp.

Wall Street futures are pointing to a weak start for North American equity markets.

Yesterday, the latest U.S. Institute for Supply Management manufacturing index showed an increase to 57 from 53.7, sending stock markets higher. The Dow Jones industrial average closed off the highs of the day but advanced 57.34 points to 9,858.46. The Nasdaq composite index rose 35.49 points to 1,967.7 — its best close in nearly 22 months; the S&P 500 was up 8.31 at 1,059.02.

The good economic news also bolstered the U.S. dollar. The Canadian dollar suffered by comparison, recording its worst one-day loss since mid-July, dropping to US74.73¢. Toronto’s S&P/TSX composite index gained 70.77 points to 7,843.47, led by a 2.7% boost in the information technology sector, with Nortel Networks gaining 16¢ to $6.04.

In Asia, Tokyo traders came back after a day’s rest during a national holiday and Tokyo’s Nikkei Stock Average rose 288.38 points, or 2.73%, to 10,847.97.

In Hong Kong, the main Hang Seng Index rose 53.91 points, or 0.44%, to 12,440.72, its highest close since August 2001.

In London at midday, the FTSE is up 0.1%. Frankfurt is 0.1% lower and Paris is off 0.2%.