Canadian manufacturing rallied in June with the largest monthly increase of shipments in 10 months, Statistics Canada said today.

Manufacturing shipments increased 1.9% to $51.4 billion in June, the highest level since January 2006.

June’s increase follows two months of declines.

While the trend for manufacturing is positive, shipments have been consistently in the $50 billion to $52 billion a month range for the last two years.

During the second quarter, shipments were up 0.6% compared with the same period in 2005, StatsCan said.

The government agency said there were gains in 13 of 21 manufacturing industries surveyed in June, accounting for 80% of total shipments.

Shipments of durable goods rose by 1.1% to $28.8 billion, pushed by computer and electronic equipment.

Shipments of non-durable goods rose 2.8% to $22.6 billion, led by increased production of oil and coal products as refinery output returned to normal levels following maintenance shutdowns in May.

The agency said total inventories fell by $454 million to $65.8 billion in June, a 0.7% decrease, and that after declining for two months, the backlog of unfilled orders rose 0.1% to $42.5 billion, a turnaround from a 0.6% drop in May.