RBC predicts slight manufacturing expansion

The RBC Canadian Manufacturing Purchasing Managers’ Index indicates only a marginal rise in new order volumes in December.

The headline RBC PMI—a composite indicator that provides a single-figure snapshot of the health of the manufacturing sector—remained at 50.4 for the second month running in December, signaling only a minor improvement in manufacturing operating conditions.

It averaged 50.7 over the fourth quarter as a whole, down from 52.8 in the third quarter and was the lowest quarterly reading since data collection began in October 2010.

Read: Emerging markets to lead global growth

The RBC PMI found new orders increased in December, partly reflecting greater demand and new product launches, but output levels were broadly unchanged from November.

Meanwhile, employment continued to increase, but the rate of job creation was at an 11-month low and input prices rose at the slowest pace since July.

“A weak global economy and a strong loonie have weighed somewhat on the broader sector and contributed to a flat PMI reading compared to November,” says Craig Wright, senior vice-president and chief economist, RBC.

Read: Canadian manufacturing sector flounders

“That said, as uncertainty is removed from the global economy in the coming months, we expect demand for Canadian exports will rise, as will investment and hiring across the economy.”

The survey also tracks changes in output, new orders, employment, inventories, prices and supplier delivery times. Read the full report.

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