Manufacturing sector growth weakened in June

Job creation hits 7-month low

Growth in the Canadian manufacturing sector weakened further in June, according to the RBC Canadian Manufacturing Purchasing Managers Index (PMI).

The PMI found business conditions within the Canadian manufacturing sector improved only modestly in June, which partly reflected further new order and output growth, although both have slowed since May. New export business fell during the latest survey period, with firms attributing the decrease to weak global demand and unfavourable exchange rates, found the survey.

At 52.8, the PMI remained above the 50 no-change level that separates growth from contraction for the ninth month running in June. That said, the PMI fell sharply from 54.8 in May, and signalled only a modest improvement in the Canadian manufacturing sector's operating conditions.

"The overall index moderated once again in June, with weakness in the Canadian manufacturing sector spread broadly across all of the survey components and across the Canadian regions," said Craig Wright, senior vice-president and chief economist at RBC. "The moderation is consistent with the trends we are seeing around the globe pointing to a temporary soft patch in the economic recovery."

Employment in the Canadian manufacturing sector increased for the ninth successive month in June. However, job creation slowed since the previous survey period to a seven-month low.

Manufacturers based in Alberta and British Columbia registered the fastest rate of employment growth in June. In contrast, Quebec registered job losses, although this was only marginal, found the survey.

The volume of new work received by Canadian manufacturers increased for the ninth consecutive month in June. Out of the 31 per cent of companies that reported higher new order levels, a number of firms commented on obtaining new clients. However, the rate of new order growth eased since May, as survey respondents said they received a lower amount of new export business, especially from United States clients.

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