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TORONTO, Nov. 1, 2013 /CNW/ - Canada's manufacturing sector grew at the
fastest pace for two-and-a-half years in October, according to the RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™). A monthly survey, conducted in association with Markit, a leading
global financial information services company, and the Supply Chain
Management Association (SCMA), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian
After adjusting for seasonal variation, the RBC PMI - a composite indicator designed to provide a single-figure snapshot of
the health of the manufacturing sector - rose to its highest level in
30 months during October. At 55.6, up from 54.2 in September and above
the series average of 53.3, the RBC PMI indicated a strong improvement
in Canadian manufacturing operation conditions.
The RBC PMI found that both output and new orders increased at the strongest rates
since April 2011, which manufacturers generally attributed to greater
client demand. Concurrently, firms continued to take on more staff,
although the rate of job creation eased slightly from September's
15-month peak. Meanwhile, inflationary pressures strengthened, with the
latest rise in input costs the greatest since March.
"Canada's manufacturing sector experienced a significant jump in October
- up to 55.6 from 54.2 in September - a sign that global economic
momentum is continuing to improve," said Craig Wright, senior vice-president and chief economist, RBC. "Firmer global growth should boost external demand going forward; this
pickup in demand for Canadian exports will no doubt augur well for
Canadian manufacturers in the foreseeable future."
The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices
and supplier delivery times.
Key findings from the October survey include:
output increases at fastest rate since April 2011;
strong rise in total new orders, with new export work also rising over
the month; and
employment growth remains solid.
The volume of new orders received by Canadian manufacturers increased further in October. Firms
generally attributed this to greater client demand in both domestic and
international markets, with new export work also rising since September. Overall, total incoming new work rose
strongly over the month, and at the second-strongest pace since data
collection began in October 2010.
Reflective of higher new order requirements, firms raised production for the sixth consecutive month in October. Moreover, the latest rise
in output was strong and the fastest for two-and-a-half years.
Nonetheless, backlogs of work increased for the second month running, while stocks of finished goods were depleted only slightly.
Manufacturers bought a larger quantity of inputs in October, with the latest rise in buying activity the strongest since
September 2011. Some of the increase in purchases was held back in
stock, with input inventories rising modestly over the month. Meanwhile, suppliers' delivery times lengthened further in the latest survey period, as vendors were
generally busier. The latest increase in lead times was the greatest
for 16 months.
Employment in Canada's manufacturing sector rose for the twenty-first successive
month in October. Approximately 16 per cent of surveyed firms hired
additional staff over the month, often linking this to higher new order
volumes. Overall, the rate of job creation was solid, despite having
eased from September's peak.
Input costs faced by Canadian manufacturers continued to rise in October, with
firms commonly reporting higher fuel and raw material prices, including
steel and packaging. Although the overall rate of inflation was the
fastest in seven months, it nonetheless remained weaker than the series
Meanwhile, companies passed on greater costs to clients by raising their
output charges. Average selling prices rose solidly and at the strongest pace since
Regional highlights include:
Alberta and British Columbia continued to post the strongest improvement in manufacturing business
conditions in October.
New order growth accelerated across most Canadian regions, with the
exception of Quebec where it eased very slightly.
The strongest rate of job creation was recorded for Alberta and British Columbia.
The weakest rate of input price inflation was posted in Ontario.
"Canada's manufacturing sector started the fourth quarter in spectacular
fashion, seeing the strongest expansion for two-and-a-half years.
Greater client demand, both domestically and in key export markets such
as Europe, drove new orders up at the fastest pace since April 2011,"
said Cheryl Paradowski, president and chief executive officer, SCMA. "The improvement in manufacturing business conditions resulted in
building supply chain pressures, as evidenced by the strongest increase
in input prices in seven months and suppliers' delivery times
lengthening to the greatest extent since June 2012."
The report is available at www.rbc.com/newsroom/pmi
Notes to Editors:
The RBC Canadian Manufacturing PMI™ Report is based on data compiled from monthly replies to questionnaires
sent to purchasing executives in over 400 industrial companies. The
panel is stratified geographically and by Standard Industrial
Classification (SIC) group, based on industry contribution to Canadian
Survey responses reflect the change, if any, in the current month
compared to the previous month based on data collected mid-month. For
each of the indicators the 'Report' shows the percentage reporting each
response, the net difference between the number of higher/better
responses and lower/worse responses, and the 'diffusion' index. This
index is the sum of the positive responses plus a half of those
responding 'the same'.
Diffusion indexes have the properties of leading indicators and are
convenient summary measures showing the prevailing direction of change.
An index reading above 50 indicates an overall increase in that
variable, below 50 an overall decrease.
The RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) is a composite index based on five of the individual indexes with the
following weights: New Orders - 0.3, Output - 0.25, Employment - 0.2,
Suppliers' Delivery Times - 0.15, Stock of Items Purchased - 0.1, with
the Delivery Times Index inverted so that it moves in a comparable
The Purchasing Managers' Index (PMI) survey methodology has developed an outstanding reputation for
providing the most up-to-date possible indication of what is really
happening in the private sector economy by tracking variables such as
sales, employment, inventories and prices. The indices are widely used
by businesses, governments and economic analysts in financial
institutions to help better understand business conditions and guide
corporate and investment strategy. In particular, central banks in many
countries (including the European Central Bank) use the data to help
make interest rate decisions. PMI surveys are the first indicators of
economic conditions published each month and are therefore available
well ahead of comparable data produced by government bodies.
Markit does not revise underlying survey data after first publication,
but seasonal adjustment factors may be revised from time to time as
appropriate which will affect the seasonally adjusted data series.
Historical data relating to the underlying (unadjusted) numbers, first
published seasonally adjusted series and subsequently revised data are
available to subscribers from Markit. Please contact email@example.com.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate
under the master brand name RBC. We are Canada's largest bank as
measured by assets and market capitalization, and are among the largest
banks in the world, based on market capitalization. We are one of North
America's leading diversified financial services companies, and provide
personal and commercial banking, wealth management services, insurance,
and investor services and wholesale banking on a global basis. We
employ approximately 80,000 full- and part-time employees who serve
more than 15 million personal, business, public sector and
institutional clients through offices in Canada, the U.S. and 44 other
countries. For more information, please visit rbc.com.
RBC supports a broad range of community initiatives through donations,
sponsorships and employee volunteer activities. In 2012, we contributed
more than $95 million to causes worldwide, including donations and
community investments of more than $64 million and $31 million in
About Supply Chain Management Association
As the leading and largest association in Canada for supply chain
management professionals, the Supply Chain Management Association
(SCMA) is the national voice for advancing and promoting the
profession. SCMA sets the standard of excellence for professional
skills, knowledge and integrity and was the first supply chain
association in the world to require that all members adhere to a Code
With nearly 8000 members working across the private and public sectors,
SCMA is the principal source of supply chain training, education and
professional development in the country. Through its 10 Provincial and
Territorial Institutes, SCMA grants the Supply Chain Management
Professional (SCMP) designation, the highest achievement in the field
and the mark of strategic supply chain leadership.
SCMA was formed in 2013 through the amalgamation of the Purchasing
Management Association of Canada and Supply Chain and Logistics
Association of Canada. With a combined history of more than 140 years,
today the association embraces all aspects of strategic supply chain
management, including: purchasing/procurement, strategic sourcing,
contract management, materials/inventory management, and logistics and
transportation. For more information, please visit scmanational.ca.
Markit is a leading, global financial information services company with
over 3,000 employees. The company provides independent data, valuations
and trade processing across all asset classes in order to enhance
transparency, reduce risk and improve operational efficiency. Its
client base includes the most significant institutional participants in
the financial marketplace. For more information, see markit.com.
Purchasing Managers' Index™ (PMI™) surveys are now available for 32 countries and also for key regions
including the Eurozone. They are the most closely-watched business
surveys in the world, favoured by central banks, financial markets and
business decision makers for their ability to provide up-to-date,
accurate and often unique monthly indicators of economic trends. To
learn more go to markit.com/economics.
The intellectual property rights to the RBC Canadian Manufacturing PMI
provided herein is owned by Markit Economics Limited. Any unauthorised
use, including but not limited to copying, distributing, transmitting
or otherwise of any data appearing is not permitted without Markit's
prior consent. Markit shall not have any liability, duty or obligation
for or relating to the content or information ("data") contained
herein, any errors, inaccuracies, omissions or delays in the data, or
for any actions taken in reliance thereon. In no event shall Markit be
liable for any special, incidental, or consequential damages, arising
out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, RBC uses the above marks
under licence. Markit and the Markit logo are registered trade marks of
Markit Group Limited.
Image with caption: "RBC Canadian Manufacturing PMI™ - Canada's manufacturing sector grows at fastest pace in two-and-a-half years in October (CNW Group/Markit)". Image available at: http://photos.newswire.ca/images/download/20131101_C9169_PHOTO_EN_32774.jpg
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