The manufacturing sector rebounded in October, led by the fastest upturn in new order volumes since November 2013, according to the RBC Canadian Manufacturing Purchasing Managers’ Index.
What’s more, production levels increased at an accelerated pace, and firms continued to boost their payroll numbers.
The RBC PMI is a monthly survey that looks at early indicators of trends in the manufacturing sector. Adjusted for seasonal influences, the index registered 55.3 in October, up from 53.5 in September (click here for regional statistics)
That’s above the neutral 50 value for the nineteenth consecutive month, which suggests overall business conditions have continued to improve.
“We saw a strong uptick in Canada’s manufacturing business conditions in October driven by new order growth,” says Craig Wright, senior vice-president and chief economist for RBC.
“Despite the challenges we are seeing in the European and emerging markets, the continued recovery of the U.S. economy should continue to support Canadian exports going forward.”
Read: Tap U.S. economic growth
One challenge, however, is “supply-chain pressures remain a concern, as the latest survey indicated a steep and accelerated deterioration in suppliers’ delivery times,” says Cheryl Paradowski, president and chief executive office at SCMA.
Additional key findings
- Input cost inflation eased to the lowest level recorded in 2014 to date
- New business levels increased across the manufacturing sector in October, with the sharpest rate of expansion in nearly a year
- Improved sales volumes have been attributed to new product launches, successful marketing initiatives and competitive pricing strategies.
- Volumes of new export business increased only marginally in October
- The rate of job creation eased slightly during October, but remained close to August’s 11-month high
- Ontario recorded the sharpest expansion of manufacturing production
- All regions posted increased employment levels, led by Alberta & British Columbia
- Alberta, British Columbia and Ontario registered stronger order inflows from abroad, compared to declines in Quebec and the rest of Canada