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Canada manufacturing modestly improving

Staff writer |
Canada's manufacturing expansion was sustained for a fifth consecutive month in August, but the rate of growth was modest and below average, according to the RBC Canadian Manufacturing Purchasing Managers' Index (RBC PMI).

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A monthly survey, conducted in association with Markit and the Purchasing Management Association of Canada (PMAC), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian manufacturing sector.

After accounting for usual seasonal variation, the RBC PMI – a composite indicator designed to provide a singlefigure snapshot of the health of the manufacturing sector – posted 52.1 in August, little-changed from July's reading of 52.0.

Remaining above the neutral threshold of 50.0, the RBC PMI has indicated growth of the manufacturing sector for five consecutive months, although the latest expansion was modest and weaker than the series average.

The RBC PMI found that both output and new orders rose at modest rates during August. This generally reflected greater client demand in both the domestic and export markets. Firms hired additional staff in light of higher activity levels, with the rate of employment growth accelerating to a three-month high. On the price front, input cost inflation picked up further, while output charges fell for the second month running.

Manufacturers received a larger volume of new orders in August, as has been the case in each month since April. New work intakes grew in both the domestic and export markets, with the United States particularly highlighted as a source for the latter. Overall, total new order growth was solid, albeit unchanged from a three-month low recorded in July.

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