The pace of growth in the Canadian manufacturing sector edged down to its slowest rate in four months in May as new order activity stagnated, according to new data from RBC Canada.
The RBC Canadian Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, declined to a seasonally adjusted 52.2 last month from 52.9 in April.
A reading above 50 shows growth in the sector, though May’s reading was the lowest level since January. The index was also below its historical average of 53.3.
Firms involved in this most recent PMI cited factors including higher prices for imported raw materials, and greater transportation and energy costs.
The report “indicates that Canada’s manufacturing sector is still being held back by sluggish global growth,” Craig Wright, chief economist at RBC, said in a statement. “As we move forward, support for the sector is expected, given easing economic uncertainty, improving growth prospects in the U.S. and a more competitive currency.”
The pace of growth reached a near three-year high in March, and has fallen ever since.
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 group, based on industry contribution to Canadian GDP.