TORONTO, March 1, 2013 /CNW/ - The February RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) pointed to the strongest expansion in Canada's manufacturing sector
since last September, although the rate of growth was only modest. A
monthly survey, conducted in association with Markit, a leading global
financial information services company, and the Purchasing Management
Association of Canada (PMAC), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian
The headline RBC PMI - a composite indicator designed to provide a single-figure snapshot of
the health of the manufacturing sector - indicated a modest improvement
in Canadian manufacturing business conditions in February. However, at
51.7, the RBC PMI remained below the series average (53.6), despite
having risen from the near survey-low of 50.5 in January.
The RBC PMI found that both output and new orders increased in February, partly
reflecting greater demand and new client wins. The rates of growth were
stronger than in January, but weaker than their respective series
averages. Higher volumes of new work encouraged manufacturers to hire
additional staff, with the rate of job creation at a four-month high.
Meanwhile, the rate of input cost inflation slowed to a seven-month low
and was modest in the context of historical data.
"The Canadian manufacturing sector fended off the February blahs with
strengthening output and employment growth," said Craig Wright, senior vice-president and chief economist, RBC. "Greater demand from
United States, Japan and China played a key role in boosting new export
work which helped nudge output growth to the fastest pace of growth in
the past six months. While it would be premature to suggest that the
global economy is treading on a much brighter path, these modest
improvements hint that better days may lie ahead."
The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices
and supplier delivery times.
Key findings from the February survey include:
RBC PMI at highest level since last September;
faster rates of output and new order growth, but both below respective
series averages; and
input price inflation weakest in seven months.
The volume of new orders received by Canadian manufacturers increased for the third month
running in February. Firms generally commented on new client wins,
although greater global demand, particularly in the United States,
Japan and China acted to boost new export work. Overall, the rise in total new orders was moderate and the strongest
since last September.
Reflective of increased new orders, companies raised production in the latest survey period. Output growth was the fastest in six
months, but weaker than the series average. Stocks of finished goods were meanwhile depleted for the second month running, and backlogs of work also fell further, although at the slowest rate in five months.
Manufacturing employment increased in February, with over 14 per cent of surveyed firms hiring
additional staff since January. Although a number of panellists linked
job creation to the increase in new work, other respondents cited
improved business confidence. Overall, the rate of employment growth
quickened from January's one-year low to a four-month high.
The quantity of inputs bought by manufacturers was unchanged since January, while stocks of purchases were reduced for the fourth consecutive month in February.
Concurrently, the latest lengthening of suppliers' delivery times was to the greatest extent in seven months, with a number of panellists
commenting that vendors experienced transportation problems relating to
the recent heavy snowfall.
Although input costs faced by Canadian manufacturing companies continued to increase in
February, the rate of inflation was the weakest since July 2012 and
modest in the context of historical data. Firms particularly mentioned
raw materials such as metals, chemicals and resin as having increased
in price over the month.
Output charges also rose in February, as higher costs were generally
passed on to clients. Although the rise in selling prices was the greatest in ten months, it was weaker than the series average.
Regional highlights include:
All four regions saw an improvement in manufacturing business conditions
in February. That said, the rates of growth were only marginal in both Ontario and Quebec.
Manufacturers based in Ontario reported a slight reduction in output, while production increased
Incoming new work fell in both Quebec and Ontario.
Strongest rate of input price inflation recorded in Alberta and British Columbia.
"Growth in the Canadian manufacturing sector gained momentum in February
and, with panellists expressing an optimistic business outlook, this
expansion may continue to strengthen in the coming months" said Cheryl Paradowski, president and chief executive officer, PMAC. "At the moment, however, growth remained below par, with both output and
new orders increasing only modestly over the month."
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,
corporate and investment banking 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 49 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 Purchasing Management Association of Canada
The Purchasing Management Association of Canada (PMAC) is the leading,
and the largest, association in Canada for supply chain management
professionals. With 7,000 members working across private and public
sectors, PMAC is the principal source of supply chain training,
education and professional development in the country, requiring all
members to adhere to a Code of Ethics. Through its 10 Provincial and
Territorial Institutes, PMAC grants the SCMP (Supply Chain Management
Professional) designation, the highest achievement in the field and the
mark of strategic leadership. For more information please see www.pmac.ca.
Markit is a leading, global financial information services company with
over 2,800 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 www.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 www.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: "Manufacturing sector experiences strongest expansion in five months, though pace remains modest (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20130301_C9245_PHOTO_EN_24145.jpg
For further information:
Royal Bank of Canada
Gillian McArdle, Head of Communications, Canada
RBC Capital Markets
Elyse Lalonde, Communications Manager, Canada
RBC Capital Markets
Purchasing Management Association of Canada
Cheryl Paradowski, President and CEO
Cori Ferguson, Director, Public Affairs & Communications
Mark Wingham, Economist
Rachel Harling, Corporate Communications
Telephone +001-917-441-6345 / +001-646-351-3584