July was a bad-news, good-news month for manufacturers, according to Statistics Canada’s latest report.

Despite a 1.4% decline in manufacturing shipments, reducing the industry by $50.1 billion, and a fall of 0.4% in new orders, costing $51.1 billion, manufacturers also saw their back orders rise for the fifth straight month, by 2.4% to $41.6 billion, the highest level since November 2002. Leading the trend is a growing demand for aircraft and railroad rolling stock.

Statistics Canada said the decrease in shipments, the fourth so far in 2005, hit 16 of 21 industries accounting for 92.5% of total shipments.

Finished product inventories rose 0.4% to $22.2 billion.