TORONTO, June 3, 2013 /CNW/ - Operating conditions in Canada's manufacturing sector improved at the strongest pace in 11 months in May, partly reflecting a sharp acceleration in the rate of new order growth, according to the RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™). 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 - rose to an 11-month high in May. At 53.2, up sharply from 50.1 in April to a level broadly in line with the series average, the headline PMI index was above the 50.0 no-change mark that separates growth from contraction and consistent with a solid improvement in Canadian manufacturing operating conditions.
The RBC PMI found that manufacturing output increased for the first time in three months during May. The solid rise in production levels was supported by a much faster expansion of new orders, which also contributed towards the first increase in backlogs of work for eight months and encouraged firms to hire additional staff. On the price front, input costs rose modestly in May, with the rate of inflation little-changed from April's nine-month low.
"Following the relatively slow pace of expansion recorded in March and April, the Canadian manufacturing sector perked up considerably in May, thanks to renewed vitality in new orders and job creation," said Craig Wright , senior vice-president and Chief Economist, RBC. "As we navigate through the remainder of 2013, we expect the sector's performance to improve further, boosting Canadian growth."The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices and supplier delivery times. Key findings from the May survey include:
- new order growth accelerates sharply to 11-month high;
- first increase in output for three months; and
- strongest rate of job creation since last August.
- Alberta and British Columbia was the only region to see a deterioration in manufacturing business conditions in May, but this was only slight and to a lesser extent than in April.
- Following reductions in April, output levels in both Alberta and British Columbia and Ontario increased in May.
- Manufacturing companies in Quebec reported the strongest increase in new export orders.
- Input costs faced by manufacturers in Ontario were broadly unchanged over the month.
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