Shipments from Canadian factories in August slipped from their highest level of 2006, Statistics Canada reported today.

With commodity prices falling, manufacturers shipped goods worth $49.8 billion, down 0.3% from July, StatsCan said.

However, if price declines were taken into account, the overall volume of shipments actually increased 0.5% to $45 billion.

Constant dollar shipments (taking price fluctuations into account) in August 2006 were 2.3% lower than they were in August last year, and declined 0.4% when comparing the first eight months of 2006 to the same period in 2005, StatsCan said.

Shipments decreased in 12 of 21 manufacturing industries in August. Durable goods shipments fell by 1.0% to $26.4 billion, with the transportation sector declining for a second month. Non-durable goods increased by 0.6% to $23.4 billion, thanks to increases in paper, chemicals and food manufacturing. These increases were tempered some by lower shipments from the petroleum industry.

Shipments of transportation equipment fell 1.5% to $9.2 billion. This was the second month of decline as the automotive post-shutdown season started more slowly than usual. Automotive manufacturing shipments fell 1.5% to $4.9 billion as a result of slower vehicle sales. Auto parts shipments were down 1.2% to $2.3 billion.

Falling prices for petroleum and coal products resulted in a decline in shipment value of 2% to $5.6 billion, dropping the industry to number three, behind the food industry.

Food manufacturing increased 1.2% to $5.7 billion, making it the second largest industrial sector after transportation, thanks in part to increased production of seafood on the East Coast and beef on the prairies.

Chemicals increased 1.8% to $4.5 billion — the second highest level on record and the highest in 10 months. Shipments of paper products jumped 4.4% to $2.7 billion, the highest level in 2006.