Manufacturing sales fell sharply in December due to extended shutdowns at several motor vehicle assembly lines, Statistics Canada reported today.

“The year 2007 ended with a thud as manufacturing sales dropped 3.4% to $48.6 billion in December, the lowest level in three years,” StatsCan said.

Longer-than-normal shutdowns at several motor vehicle plants were the primary source of the deep cut in sales, the government agency said.

Excluding the motor vehicle and parts industries, total manufacturing sales decreased a more moderate 0.8% in December.

Canada’s manufacturing sector managed to stay afloat in 2007, despite rapid currency appreciation, rising energy costs and a softening U.S. export market.

Sharp price-driven increases for both petroleum and primary metals provided the necessary buoyancy, as sales edged up 0.3% over 2006 levels to $612.9 billion.

The December decline was the largest since August 2003, when a widespread electrical blackout dragged down much of Ontario’s production.

Despite continuing strength in key price-driven industries, overall manufacturing activity decreased in four of the last five months, due in part to significant cuts in the volume of goods manufactured.

Sixteen of 21 manufacturing industries were battered in December, accounting for almost two-thirds of total sales.

The agency says much of the year’s decline was attributable to the soaring value of the Canadian dollar and making Canadian-made goods more expensive to many foreign customers.