TORONTO, May 1, 2014 /CNW/ - April data pointed to another positive
month for the Canadian manufacturing sector, with the latest survey
pointing to higher levels of output, new business and employment,
according to the RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™). A monthly survey, conducted in association with Markit, a leading
global financial information services company, and the Supply Chain
Management Association (SCMA), the RBC PMI offers a comprehensive and early indicator of trends in the Canadian
Adjusted for seasonal influences, the headline RBC PMI registered 52.9
in April, down slightly from 53.3 in March but above the neutral 50.0
value for the thirteenth successive month. All five component indices
had a positive influence on the RBC PMI in April. The drop in the index
since March mainly reflected slower rates of output and new business
Nevertheless, supply chain disruptions persisted, leading to longer
delivery times and another rise in backlogs of work. Meanwhile,
manufacturers noted that input costs were pushed up by the weaker
Canadian dollar, which in turn contributed to a solid increase in
factory gate charges during the latest survey period.
"Though we saw a slight dip in April, it is encouraging to see Canada's
manufacturing sector continued to grow for what is now the thirteenth
month in a row," said Craig Wright, senior vice-president and chief economist, RBC. "Our bottom line continues to be that a strengthening U.S. economy
alongside a more competitive Canadian dollar will support improving
conditions for Canada's manufacturers in the near-term."
The headline RBC PMI reflects changes in output, new orders, employment, inventories, prices
and supplier delivery times.
Key findings from the April survey include:
Output expanded in April, but at a slower pace than in the previous
Job creation hit a five-month high.
There was a sharp rise in average cost burdens.
Manufacturers in Canada signalled that growth in production eased for
the second month running in April and was slightly slower than the
average since the survey began in late 2010. The moderation in output
growth reflected a slight slowdown in the pace of new business
expansion in April.
Volumes of new work from abroad increased only marginally in April and
the rate of expansion eased over March. Companies that reported a rise
in new export orders generally cited exchange rate depreciation and
stronger underlying demand from the U.S.
Delivery times from suppliers lengthened in April, which manufacturers
attributed to logistics bottlenecks and, in some cases, ongoing
disruptions from adverse weather conditions. The latest deterioration
in vendor performance was one of the sharpest seen over the past
two-and-a-half years. As a result, backlogs of work accumulated for the
third month running and some manufacturers sought to increase their
pre-production inventories in April. Stocks of finished goods also rose
during the latest survey period.
Greater production requirements and resilient confidence about the
economic outlook supported job creation across the manufacturing
sector. The latest rise in employment levels was the fastest since
November 2013, but still slightly weaker than the historical average.
April data indicated a further sharp rise in average cost burdens within
the manufacturing sector. The rate of input price inflation eased since
March, but was still one of the fastest recorded over the survey
history. Meanwhile, the latest survey pointed to a solid rise in
factory gate charges, which extended the current period of output
charge inflation to eight months. Manufacturers widely linked higher
output prices to strong cost inflation in recent months.
Regional highlights include:
All regions posted an increase in manufacturing output in April.
Quebec was the only region to register a decline in new order volumes.
Ontario reported the sharpest lengthening of supplier delivery times.
Alberta & British Columbia continued to record the fastest pace of input price inflation.
"April's survey highlights that the manufacturing sector is experiencing
improving business conditions, although output growth moderated
slightly since the previous month" said Cheryl Paradowski, president and chief executive officer, SCMA. "Exchange rate depreciation has helped support export sales, but
higher import prices are pushing up cost burdens, while adverse weather
conditions and logistics bottlenecks have placed pressures on supply
chains in recent months."
The report is available at www.rbc.com/newsroom/reports/rbc-purchasing-managers-index.html.
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 firstname.lastname@example.org.
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About Supply Chain Management Association
As the leading and largest association in Canada for supply chain
management professionals, the Supply Chain Management Association
(SCMA) is the national voice for advancing and promoting the
profession. SCMA sets the standard of excellence for professional
skills, knowledge and integrity and was the first supply chain
association in the world to require that all members adhere to a Code
With nearly 8000 members working across the private and public sectors,
SCMA is the principal source of supply chain training, education and
professional development in the country. Through its 10 Provincial and
Territorial Institutes, SCMA grants the Supply Chain Management
Professional (SCMP) designation, the highest achievement in the field
and the mark of strategic supply chain leadership.
SCMA was formed in 2013 through the amalgamation of the Purchasing
Management Association of Canada and Supply Chain and Logistics
Association of Canada. With a combined history of more than 140 years,
today the association embraces all aspects of strategic supply chain
management, including: purchasing/procurement, strategic sourcing,
contract management, materials/inventory management, and logistics and
transportation. For more information, please visit scmanational.ca.
Markit is a leading global diversified provider of financial information
services. We provide products that enhance transparency, reduce risk
and improve operational efficiency. Our customers include banks, hedge
funds, asset managers, central banks, regulators, auditors, fund
administrators and insurance companies. Founded in 2003, we employ over
3,000 people in 11 countries. For more information, please 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 markit.com/economics.
The intellectual property rights to the RBC Canadian Manufacturing PMI
provided herein are owned by or licensed to 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 either registered trade marks of Markit Economics Limited or are
licensed to Markit Economics Limited. RBC uses the above marks under
licence. Markit is a registered trade mark of Markit Group Limited.
Image with caption: "RBC Canadian Manufacturing PMI™ - Canada's manufacturing sector continued to grow in April (CNW Group/Markit)". Image available at: http://photos.newswire.ca/images/download/20140501_C6049_PHOTO_EN_39849.jpg
For further information:
Royal Bank of Canada
Sanam Heidary, Head of Communications, Canada
RBC Capital Markets
Elyse Lalonde, Communications Manager, Canada
RBC Capital Markets
Supply Chain Management Association
Cheryl Paradowski, President and CEO
Amanda Cormier, Acting Director, Public Affairs & Communications
Tim Moore, Senior Economist
Alex Brog, Corporate Communications