Despite stronger shipments data reported today, economists are not ready to call an end to the manufacturing recession just yet.

Canadian manufacturers reported a better-than-expected 1.7% gain in shipments in March, after some big declines in previous months. Economists, however, are not seeing the end to hard times in this data.

The first increase in auto production in five months drove the improvement, as did higher computer and electronic output. Inventories were unchanged in March.

BMO Nesbitt Burns says that although the data is encouraging, “This does not break the underlying downward trend in shipments. The volatility of the Canadian data can sometimes mask emerging trends, but it’s notable that shipments dropped at a 13.6% annual rate in Q1, compared with a 6.4% decline in U.S. industrial output in the quarter.”

It notes that these bounce backs are coming off some large declines. High tech output is still down almost 27% from last summer’s peak, and shipments as a whole are still down 2.4% from year-ago levels.

“In isolation, today’s manufacturing report is slightly better than expected, and points to some upside risk for Friday’s trade surplus,” says BMO Nesbitt Burns. “However, the clear weakening trend in manufacturing remains intact, and renewed softening in U.S. auto sales is not encouraging.”