Following a lacklustre finish to 2004, manufacturers rebounded in January with solid gains in shipments and orders, Statistics Canada reports today in its Monthly Survey of Manufacturing.

Wide ranging increases contributed to a 3% surge in shipments to $51.5 billion, while new orders soared 7.1% and manufacturers’ backlog of unfilled orders jumped 5.2% ending a five-month slide.

The impact of the strong Canadian dollar, coupled with high input costs took a toll on the manufacturing sector in the later months of 2004, StatsCan reports.

Prospects however, improved in January as a combination of higher volumes of production and a bounce-back in industrial prices contributed to strong shipment gains at the start of the year.

At 1997 prices, shipments jumped 3.2% to $48.6 billion in January, following a 0.4% decline in December.

Most manufacturing industries posted increases accounting for 86% of total shipments in January, with big-ticket industries including aircraft and parts, heavy trucks, motor vehicles and machinery, leading the way as they worked their way through various orders during the month. Durable goods manufacturers boosted output by a 4.5% to $29.7 billion.

Shipments of nondurable goods rose 1% to $21.9 billion, making up some of the ground lost in December when lower petroleum prices contributed to a 1.4% drop in shipment values.

In January, the transportation equipment sector contributed to sizable increases in shipments for Ontario and Quebec, where most of Canada’s manufacturing takes place.

Most provinces posted higher shipments with only Newfoundland and Labrador, Prince Edward Island and the territories reporting declines.