Improvement in the manufacturing sector has slowed due to moderation in output growth, finds the RBC Canadian Manufacturing Purchasing Managers’ Index.
The index (which measures changes in output, new orders, employment, inventories, prices and supplier delivery times each month) slipped to 52.2, down from 52.9 in April.
“May’s reading indicates Canada’s manufacturing sector is being held back by sluggish global growth,” says Craig Wright, senior vice-president and chief economist, RBC. However, “support for the sector is expected [going forward] given easing economic uncertainty, improving growth prospects in the U.S. and a more competitive currency.”
Index highlights include:
- Output experienced weakest gain since August 2013
- New export order growth slowed
- Input cost inflation eased to four-month low
- Quebec was the only province to register faster output growth in May (compared to April), and job creation was strongest in the region as well.
Despite the slowdown recorded by the index reading, says Supply Chain Management Association CEO Cheryl Paradowski, “the latest survey pointed to resilient job creation at manufacturing companies. [It also] suggested optimism about the longer-term business outlook [since] manufacturers indicated an easing of both supply chain pressures and input cost inflation in May.”
Check out the survey here.