The pace of growth in the Canadian manufacturing sector slowed in January 2015 to its weakest level in over a year-and-a-half as new orders slowed and employment shrank, according to new data.
The RBC Canadian purchasing managers index dropped to 51 last month, signalling that manufacturers expected only a marginal improvement in business conditions at the start of 2015, a stark contrast to optimistic views in October and November.
A reading above 50 shows growth in the sector. The gauge of new orders also slipped to 51.0 from 53.9, while hiring contracted to 49.4 from 52.9, ending 11 months of growth.
“The latest data indicates that Canada’s manufacturers started the year with concerns around uncertainty about global growth prospects, financial market volatility and a sharp drop in oil prices,” Craig Wright, chief economist at RBC, said in a statement.
Key highlights of the report include:
• Output and new business growth both eased sharply
• Manufacturing employment fell for the first time in 12 months
• Input cost inflation dropped to its lowest since September 2013, despite a weaker exchange rate
• All regions monitored by the survey recorded weaker output trends than in December
• Quebec and Alberta & British Columbia saw the most noticeable reductions in employment
• Input cost pressures moderated in all regions at the start of 2015
The RBC report is available at this link.
