Outlook less positive for Canada’s manufacturing sector: RBC
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Ontario and Quebec, the two regions with Canada's biggest manufacturing sectors, showed declines in RBC's June Canadian manufacturing PMI index.
The outlook for Canada’s manufacturing sector has become slightly less positive than it was in May, according to the results of a monthly survey of purchasing managers.
The RBC Canadian manufacturing PMI index registered 51.8 in June, down from 52.1 in May.
It was the fourth month in a row for the index to register more than 50.0, which indicates that purchasing managers at Canadian manufacturing companies see signs of expansion in the coming months.
But Royal Bank says June’s index had the weakest national reading since March, which marked a return to business confidence after seven months of declining sentiment.
“This weakening has coincided with the suspension of oilsands production in the face of wildfires through much of Alberta that is expected to send overall GDP growth into negative territory in the second quarter,” RBC said in a commentary. “That said, there has not been a noticeable further weakening in the relevant regional numbers. The more likely cause of the recent weakening trend in the PMI is the stall in export growth.”
Of the four regional breakdowns compiled by the bank, three indicated expansion. The weakest reading was for Alberta and B.C., at 46.2.
The two regions with Canada’s biggest manufacturing sectors, Ontario and Quebec, showed declines. Ontario’s index dropped to 53.6 from 55.1 in May and Quebec’s dropped to 54.6 from 55.7. The rest of Canada rose to 57 from 56.6.