Toronto – The RBC Purchasing Managers’ Index (PMI) Index for January indicated that the improvement in business conditions in Canadian manufacturing slowed once again, with the index dropping to 51.7 in January 2014 from 53.5 in December 2013 and 55.3 in November 2013.
The drop in the index reflected weaker readings for all five components, led by the measure for new orders dropping to 52.9 in January from 55.0 in December.
All four Canadian regions showed index readings lower in January versus December.
Though the January PMI indicated rising business confidence in the manufacturing sector, the rate of increase has now slowed for the third consecutive month and is at its lowest level since April 2013. However, RBC’s expectation is that with US growth expected to strengthen this year relative to 2013 and with the Canadian dollar having weakened over the second half of last year and expected to depreciate further through this year, business sentiment should start to trend higher as we move further into 2014.
The latest report did indicate an encouraging increase in export new orders that the bank expects will improve further in subsequent months.