Expansion in Canada’s manufacturing sector continued in August for a fifth consecutive month, but the rate of growth was modest and below average, according to new data from the Royal Bank.
The RBC purchasing managers index came in at 52.1 for August, little changed from July’s reading of 52. However, the monthly survey, conducted in association with Markit, remained above 50, which means the manufacturing sector continued to expand.
It also found that both output and new orders rose at modest rates in August, reflecting greater client demand in both the domestic and export markets.
According to RBC, firms hired additional staff in light of higher activity levels, with the rate of employment growth accelerating to its highest level since May.
RBC chief economist Craig Wright said that the continued increases suggest that “some of the recent shocks to the economy have been mitigated by strength elsewhere.”
“We expect that improving US demand will continue to provide a boost to the manufacturing sector for the balance of the year,” he said.
The index fell below 50 in March for the first time since the survey was created almost three years ago, but has been steadily improving ever since.