TORONTO, Sept. 3, 2013 /CNW/ - Canada's manufacturing expansion was sustained for a fifth consecutive month in August, but the rate of growth was modest and below average, 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.
After accounting for usual seasonal variation, the RBC PMI - a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector - posted 52.1 in August, little-changed from July's reading of 52.0. Remaining above the neutral threshold of 50.0, the RBC PMI has indicated growth of the manufacturing sector for five consecutive months, although the latest expansion was modest and weaker than the series average.
The RBC PMI found that both output and new orders rose at modest rates during August. This generally reflected greater client demand in both the domestic and export markets. Firms hired additional staff in light of higher activity levels, with the rate of employment growth accelerating to a three-month high. On the price front, input cost inflation picked up further, while output charges fell for the second month running.
"The PMI continued to make positive gains for the fifth consecutive month and moved modestly higher in August, suggesting some of the recent shocks to the economy have been mitigated by strength elsewhere," said Craig Wright , senior vice-president and chief economist, RBC. "We expect that improving U.S. demand will continue to provide a boost to the manufacturing sector for the balance of the year."The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices and supplier delivery times. Key findings from the August survey include:
- output and new order growth continues;
- strongest rise in employment since May; and
- input price inflation picks up to a five-month high.
- Ontario saw only a marginal improvement in manufacturing business conditions in August - the weakest among the four regions.
- New orders fell in Ontario , but increased elsewhere.
- Employment growth was strongest in Alberta and British Columbia .
- Output charges fell in three regions, led by Alberta and British Columbia .
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