TORONTO, Aug. 1, 2013 /CNW/ - Manufacturing business conditions in Canada improved for the fourth consecutive month in July; however, the rate of growth was modest and the weakest in three months, 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.
At 52.0, the headline RBC PMI - a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector - remained above the 50.0 no-change mark for the fourth successive month in July, signalling a further improvement in Canadian manufacturing business conditions. However, down from 52.4 to a three-month low, the headline index indicated a modest expansion that was weaker than the series average.
The RBC PMI indicated ongoing growth of both output and new orders in July, with firms generally attributing this to greater client demand and new product launches. However, the rates of growth eased to three-month lows and this contributed to a weaker rise in employment. Meanwhile, firms reduced their output charges for the first time since March 2012, often linking discounting to stronger competitive pressures.
" Canada's manufacturing sector stayed afloat in July, although conditions were slightly less favourable than on average historically," said Craig Wright , senior vice-president and chief economist, RBC. "We expect the U.S. economy to shift into higher gear in the second half of the year, slowly increasing demand for Canada's exports, and manufacturing goods in particular - this is good news for overall GDP growth."The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices and supplier delivery times. Key findings from the July survey include:
- modest increases in both output and new orders;
- weakest rate of job creation since April; and
- average selling prices fall at strongest pace in near three-year series history.
- Alberta and British Columbia was the only region to see deterioration in manufacturing business conditions in July, although this was only slight.
- Manufacturers based in Ontario saw a marginal reduction in new order volumes.
- Employment increased in three regions during July, with the only exception being Alberta and British Columbia that saw broadly no change from June.
- The weakest rise in input costs was recorded for Quebec .
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