Jan. 18 (Bloomberg) -- Canada's factory shipments rose twice as much as forecast in November on rising prices for petroleum and coal products. Excluding price increases, manufacturing sales fell.

The 1.1 percent increase to C$50.6 billion ($49.3 billion) was the fastest since July and just the third time in 2007 that monthly sales increased by more than one percent. Economists surveyed by Bloomberg News had predicted a 0.5 percent increase, based on the median of 22 responses.

The gain suggests some manufacturers may be able to ride out a slowdown in the U.S. and a higher Canadian currency, amid growing demand in Asia for the country's commodities and commodity-related products. Still, a drop in sales by volume signals much of the industry is struggling.

This ``should not alter the view that Canadian manufacturing is in trouble,'' Avery Shenfeld, senior economist at CIBC World Markets Inc. in Toronto, said in a note to investors.

Manufacturing lost 33,200 jobs in December, bringing the industry's total decline for 2007 to 131,600, Statistics Canada said Jan. 11.

The Canadian dollar reached a record 90.58 Canadian cents per U.S. dollar on Nov. 7. While still making Canadian goods more expensive abroad and hurting exporters, the currency has dipped below parity since then, trading at C$1.0271 per U.S. dollar at 4:06 p.m. in Toronto.

Petroleum, Coal

The advance in sales was led by manufacturers of petroleum and coal products, such as roof shingles and asphalt, who benefited from a 7.3 percent jump in prices during the month. Had prices for the country's manufactured goods not changed, sales would have fallen 0.1 percent, Statistics Canada said.

Sales for the primary metal industry were up 2.3 percent in November, while sales of aerospace products gained 1.9 percent. Motor vehicle producers posted a 2 percent gain.

The sale of paper products declined 3 percent while sales of chemical products fell 1.7 percent.

Factories registered an 8.1 percent increase in new orders, a 4.9 percent gain in unfilled orders and a 0.5 percent gain in inventories during November, the statistics agency said.

To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net.

Last Updated: January 18, 2008 16:08 EST