MRO Magazine

Canada's manufacturing sector grew, albeit weakly, in August


September 10, 2012
By PEM Magazine

Canada’s manufacturing sector grew in August, although at its weakest pace in five months, according to the RBC Canadian Manufacturing Purchasing Managers’ Index (RBC PMITM). A monthly survey, 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 – indicated a solid improvement in Canadian manufacturing business conditions in August. However, having fallen slightly from 53.1 in July to 53.0, the PMI remained below the series average of 54.2 and signalled the weakest manufacturing expansion in five months.

The RBC PMI indicated further increases in both output and new orders in August. However, the rate of output growth was unchanged from July’s four-month low, while the expansion for new orders remained below the series average. Employment also increased over the month, but the rate of job creation slowed slightly to its weakest since April. Input prices meanwhile increased in August, reversing the marginal decline in July.

"In contrast to declining manufacturing conditions around the world, particularly in the U.S., Euro area and China, the Canadian manufacturing sector is continuing to grow, albeit at a moderately slower pace," said Craig Wright, senior vice-president and chief economist with RBC. "It is encouraging to see that new export orders rebounded and manufacturing firms reported that they continued to hire employees in August, which may provide a favourable early indication in advance of the broader Canadian employment report due out on Friday."


In addition to the headline RBC PMI, the survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times.

Key findings from the August survey include:

  • growth of output unchanged from July’s four-month low;
  • new orders increase solidly, partly reflecting an uptick in new export work; and
  • input prices rise solidly, reversing marginal decline recorded one month previously.