Canadian manufacturing sales advanced 0.6 per cent to close 2011, the fifth increase in six months. The gains were driven by the transportation equipment industry which rose 3.7 per cent, though higher sales were reported in 12 of the 20 manufacturing sectors surveyed. BC manufacturing sales fell 1.9 per cent in December but were 1.4 cent higher than in December 2010. BC manufacturing sales were lead lower on weakness in forest products shipments which declined 5 per cent, though manufacturing sales declined in most sectors in BC.

In the United States, housing starts (a key bellwether for BC's forestry sector) rose 1.5 per cent in January, coming in at a seasonally adjusted annual rate (SAAR) of 699,000 units.  US new home construction has improved in recent months with inventories falling and the drawn-out foreclosure process finally being addressed by policymakers. We expect the slow-healing to continue through 2012 with steady gains in housing starts throughout the year.