TORONTO, Aug. 1, 2014 /CNW/ - Canadian manufacturers experienced a further improvement in overall
business conditions during July, according to the RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™), driven by faster rises in output, new orders and employment at the
start of the third quarter. Meanwhile, input cost inflation continued
to moderate, which in turn contributed to the slowest rise in
manufacturers' output charges so far this year. 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
At 54.3 in July, up from 53.5 in June, the headline seasonally adjusted
RBC Canadian Manufacturing PMI posted above the neutral 50.0 value for
the sixteenth consecutive month. The latest reading was the highest
since November 2013 and signalled a robust overall improvement in
manufacturing sector business conditions.
"Canada's manufacturers kicked off the second half of 2014 on stronger
footing, clearly benefiting from improving global economic activity -
it's encouraging to see the momentum," said Paul Ferley, assistant chief economist, RBC. "With the U.S. economy pushing ahead, we expect this trend to
The headline RBC PMI reflects changes in output, new orders, employment, inventories and
supplier delivery times.
Key findings from the July survey include:
Sharpest improvement in business conditions since November 2013
A pick up in output and new orders growth
Staffing levels rose for the sixth successive month
Stronger rates of output and new business growth were the key positive
influences on the headline index in July. Latest data signalled that
production growth across the manufacturing sector accelerated for the
second month running and was the fastest since November 2013. New
business growth also regained momentum so far this summer, with the
latest rise in incoming new work the steepest it has been in eight
months. Reports from survey respondents cited improving underlying
demand and greater confidence among clients. Moreover, new business
intakes were also supported by stronger export sales during July, with
the rate of new export order growth the most marked since March.
Increased demand patterns contributed to an increase in backlogs of work
across the manufacturing sector for the sixth consecutive month in
July. The current period of rising volumes of unfinished work is the
longest recorded by the survey for three years, which in turn supported
further manufacturing job creation. Latest data pointed to a solid rise
in payroll numbers with the rate of employment growth reaching its
strongest since September 2013.
July data indicated that manufacturers continued to boost their volumes
of input buying during July, and the latest expansion of purchasing
activity was the steepest recorded in 2014 to date. Despite a solid
increase in input buying, pre-production inventory volumes dipped for
the third month running. Meanwhile, stocks of finished goods also
decreased in July. The latest reduction in post-production inventories
was the sharpest for 12 months, with some firms citing stronger than
expected sales at their plants.
Meanwhile, input cost inflation eased further from the near-three year
high seen during March. Although still sharp, the latest rise in
average cost burdens was the least marked since January. A softer rise
in input prices during July contributed to the weakest increase in
manufacturers' output charges since December 2013.
Regional highlights include:
Quebec continued to register the strongest upturn in overall business conditions
All four regions signalled an increase in manufacturing employment levels…
…led by Quebec and Ontario
New export orders rose in all four regions monitored by the survey
"Canadian manufacturers have made a bright start to the third quarter of
2014, as highlighted by stronger production growth and another
improvement in sales volumes during July," said Cheryl Paradowski, president and chief executive officer, SCMA. "Therefore, the latest survey suggests a decisive shift towards faster
growth across the manufacturing sector this summer, with output, new
business and employment all rising at the fastest rates seen so far
this year. Moreover, business conditions are improving against a
backdrop of softening cost pressures, which in turn contributed to the
slowest increase in manufacturers' output charges since the end of
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 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.
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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
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Image with caption: "RBC Canadian Manufacturing PMI(tm) - RBC PMI hits eight-month high in July (CNW Group/Markit)". Image available at: http://photos.newswire.ca/images/download/20140801_C9172_PHOTO_EN_42308.jpg
For further information:
Royal Bank of Canada
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
Joanna Vickers, Corporate Communications