TORONTO, July 2, 2014 /CNW/ - The RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) pointed to a solid rebound in the performance of the manufacturing sector in June, as output and new business growth picked up to the strongest recorded so far in 2014. A monthly survey, conducted in association with Markit, a leading global financial information services company, and the Supply Chain Management Association (SCMA), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian manufacturing sector.
Adjusted for seasonal influences, the headline RBC Canadian Manufacturing PMI registered 53.5 in June, up from 52.2 in May, to signal the sharpest overall improvement in business conditions since December 2013. The rise in the headline index was mainly driven by stronger rates of output and new business expansion.
"The latest RBC PMI data indicates that in June, Canada's manufacturers experienced the best conditions for growth in half a year," said Craig Wright, senior vice-president and chief economist, RBC. "We expect that those conditions will further improve going forward supported by a strengthening global economy, increases in external demand for domestic goods and a depreciating Canadian dollar."
The headline RBC PMI reflects changes in output, new orders, employment, inventories and supplier delivery times.Key findings from the June survey include:
- Output and new orders rose at sharpest pace in 2014 to date
- Job creation strengthened
- Input cost inflation eased for the third month running
Manufacturing output growth picked up markedly from the nine-month low registered in May. The current period of rising production volumes stretches back to May 2013, with survey respondents attributing the latest expansion to greater client spending and new product launches. In line with the trend for output, new business growth rebounded in June and reached a six-month high. Manufacturers mainly cited stronger domestic demand, as new export order growth remained only marginal, despite accelerating from the 14-month low registered in May. When a rise in new work from abroad was reported, survey respondents generally pointed to improved demand from clients in the United States. Staffing levels increased at a solid pace in June, thereby extending the current period of manufacturing job creation to five months. Despite an upturn in payroll numbers, stronger demand resulted in the fastest rise in backlogs of work since March.