Manufacturing index accelerates to 15-month high

Canada’s manufacturing expansion accelerated to a 15-month high in September, according to the RBC Canadian Manufacturing Purchasing Managers’ Index (RBC PMI).

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The seasonally adjusted RBC PMI – a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector – rose to 54.2 in September, up from 52.1 in August. This indicated further improvement in manufacturing business conditions, with the rate of growth above the series average and the fastest since June 2012.

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Further, both output and new order growth accelerated. In particular, the latest rise in total new work intakes was strong and the fastest since June 2012. This partly reflected the greatest increase in new export orders for two-and-a-half years. Meanwhile, the rate of job creation also quickened to a 15-month high, as firms hired additional staff to handle increased business activity.

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“The global economy is gaining traction, and, with that, we are seeing increasing demand for Canadian exports,” says Craig Wright, senior vice president and chief economist, RBC. “An anticipated strengthening in global economic growth, particularly in the U.S. which is Canada’s largest trading partner, bodes well for manufacturing activity late this year and early next.”

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