RBC's Craig Wright says economic weak patch to be short lived
TORONTO, Dec. 3, 2012 /CNW/ - The RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) signalled that Canada's manufacturing sector grew only marginally in November. A monthly survey, conducted in association with Markit, a leading global financial information services company, and the Purchasing Management Association of Canada (PMAC), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian manufacturing sector.
The headline RBC PMI - a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector - fell from 51.4 to 50.4 in November, and indicated the weakest rate of manufacturing growth since data were first available in October 2010.
The fall in the RBC PMI partly reflected incoming new work remaining broadly unchanged from October and the first contraction in output in 26 months of data collection. Manufacturers generally cited weak market conditions. Nevertheless, firms continued to hire additional staff in November, although the rate of job creation was only modest and the slowest since April."Minimal growth in the manufacturing sector in November likely reflects the continued global economic uncertainty and the time-lagged impact of other indicators suggesting that the Canadian economy weakened during the third quarter," said Craig Wright , senior vice-president and chief economist, RBC. "We expect the economic weak patch to be short lived, however. As the downside risks plaguing the global economy start to ease, so will some of the weight on Canadian export demand and the broader manufacturing sector." In addition to the headline RBC PMI , the survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times. Key findings from the November survey include:
- RBC PMI falls to lowest level in 26 months of data collection;
- output declines in November, while new orders broadly unchanged from October; and
- rate of job creation at seven-month low.
- Alberta and British Columbia and Ontario were the only Canadian regions to post improved manufacturing operating conditions in November.
- New orders fell in three regions, with only Ontario recording an increase in new work since October.
- The strongest rate of employment growth was posted in Alberta and British Columbia .
- Input prices rose at the fastest rate in Alberta and British Columbia , while the slowest increase was recorded in Quebec .