TORONTO, April 2, 2013 /CNW/ - The March RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) signalled the first deterioration in manufacturing business conditions since data collection began in October 2010, with monthly declines reported for both output and new orders. 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 below the 50.0 no-change mark that separates growth from contraction in March. This was the first sub-50 reading in the two-and-a-half year survey history. At 49.3, down from 51.7 in February, the RBC PMI was consistent with a marginal rate of contraction in March.
The RBC PMI found that both the levels of output and new orders were lower in March compared with one month previously. A number of firms linked this to weak client demand. The reduced workloads also contributed to a slower rate of job creation. Meanwhile, on the price front, the rate of input cost inflation was strong and faster than in February, but remained slower than the series average.
"The deterioration in the Canadian manufacturing measure is surprising in the face of improving growth in both the U.S. and various emerging economies. However, uncertainty about resolving fiscal imbalances in the U.S. - with sequestration going ahead March 1 - and in the Euro-area may have weighed on sentiment," said Craig Wright , senior vice-president and chief economist, RBC. "This weak spot should be short-lived, however, as we expect that global demand for Canadian exports will recover, providing a welcome boost for domestic manufacturers."The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices and supplier delivery times. Key findings from the March survey include:
- RBC PMI falls below the 50.0 no-change mark that separates growth from contraction;
- both output and new orders fall modestly in March; and
- employment growth slows.
- Three regions saw a deterioration in manufacturing business conditions in March. The rates of contraction were moderate in both Alberta and British Columbia and Ontario , but marginal in Quebec .
- Production fell at the sharpest rate in Alberta and British Columbia .
- The strongest rate of contraction in new orders was recorded in Ontario .
- Job losses were reported in Alberta and British Columbia , but employment growth was recorded elsewhere.
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