Canadian manufacturing shipments declined in April, losing most of March’s gains, Statistics Canada reported today.

The government agency said a substantial drop in the production of aerospace products and parts was largely behind April’s 1.5% decrease in shipments which stood at $50.4 billion.

This was the third decline so far in 2006, and followed March’s 1.6% advance in shipments. Excluding the aerospace industry, shipments were down a more modest 0.4%.

StatsCan said the sharp drop in shipments boosted the inventory-to-shipment ratio to 1.31 in April, equal to the ratio’s recent high set in February.

Uncertainty in the manufacturing sector, due in part to the strengthened value of the Canadian dollar and soaring input costs, have contributed to some weakness in shipment activity, the government agency said.

In April, two-thirds of the manufacturing industries, accounting for 66% of total shipments, posted declines. Both the durable (-1.8%) and nondurable goods (-1.1%) sectors recorded lower shipments for the month.

A quarter-end boost in production in March by some aerospace manufacturers led to a larger than normal drop in production in April. Production of aerospace products and parts fell 37.8% to $892 million in April, following last month’s 38.2% surge. Despite the decline, a gradual recovery in global demand for aircraft and parts has fuelled growth in Canada’s aerospace industry compared to last year.

Food manufacturers also reported wide ranging declines, as shipments tumbled 4.2% to $5.6 billion.

The fabricated metal products industry also registered a 3.4% drop in shipments to $3.1 billion, following some big orders shipped in recent months.

In spite of strong demand and sky-high prices for primary metals and petroleum, the strength of these industries only partly offset the overall decline in shipments for April.

Soaring prices contributed to a 5.5% jump in shipments of primary metals to $4.4 billion.

Motor vehicle shipments increased 2.7% to $5.3 billion in April, following a 6.8% decline in March due to temporary plant closures.

April saw the return of record high prices for petroleum products. By mid-month, the price of crude oil exceeded $73 US per barrel, surpassing its previous apex in September 2005.

Separately, StatsCan reported that new motor vehicle sales edged down in April, giving up the minimal gains realized in March.