TORONTO, Feb. 1, 2013 /CNW/ - The RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) pointed to only marginal increases in both output and new orders in
January; however, this marks the first rise in production levels since
last October. 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 - signalled only a marginal
improvement in Canadian manufacturing business conditions in January.
At 50.5, the RBC PMI was only slightly higher than the survey-low of
50.4 recorded in both November and December.
The RBC PMI found that output increased for the first time in three months in
January, albeit only slightly, but new order growth slowed since
December and was only marginal. The rate of job creation also weakened,
easing to a 12-month low, while the rate of input price inflation
strengthened to its fastest since last September.
"The Canadian manufacturing sector experienced a relatively lacklustre
start to the New Year amid ongoing global economic uncertainty," said Craig Wright, senior vice-president and chief economist, RBC. "As some of the more
extreme downside risk scenarios look less likely now, we should see
confidence in the global economy improve, paving the way for a stronger
recovery in Canadian manufacturing."
In addition to the headline RBC PMI, the survey also tracks changes in output, new orders, employment,
inventories, prices and supplier delivery times.
Key findings from the January survey include:
RBC PMI only slightly higher than the survey lows reported in November
output increases for first time in three months, albeit only marginally;
slowest rate of job creation in 12 months.
Although the volume of new orders received by Canadian manufacturers rose further in January, with
one-in-four panellists reporting an increase since December, the rate
of growth was only marginal. Firms generally cited weak client demand. New export orders, meanwhile, were broadly unchanged in the latest survey period, but
this was nonetheless an improvement from the declines recorded in the
previous two months.
After having fallen for two consecutive months, manufacturing production increased in January. However, output growth was only slight.
Meanwhile, stocks of finished goods decreased at the sharpest rate since last July, and backlogs of work fell solidly and for the fourth month running.
Reflective of higher output requirements, the quantity of inputs bought by manufacturers increased in January. Purchasing activity rose
modestly, but growth remained weaker than the series average. Input inventories, meanwhile, fell for the third consecutive month and at the strongest
rate in a year.
Suppliers' delivery times lengthened further in the latest survey period. Panellists suggested
that the combination of low inventories and capacity issues at
suppliers contributed to the latest deterioration in vendor
Employment in Canada's manufacturing sector increased in January, taking the
current sequence of job creation to 12 months. However, the rate of
growth has slowed continually since reaching a peak last May, with the
latest expansion only marginal.
Firms reported higher input costs in January, with raw materials such as resin, chemicals and metals
particularly mentioned as having increased in price. Overall, the rate
of inflation was the strongest in four months, but slower than the
series average. Companies passed greater costs on to clients by raising
their charges, but selling prices nonetheless rose at a weaker pace than costs overall.
Regional highlights include:
Manufacturing business conditions in both Alberta and British Columbia and Ontario improved in January.
Reduced levels of new business only posted in Quebec, with growth signalled elsewhere.
Strongest rate of job creation recorded by manufacturers in Ontario.
All four regions recorded faster rates of input price inflation in
January, with the strongest rise posted in Alberta and British Columbia.
"The January RBC PMI rose only slightly from the survey low recorded at
the end of last year, with the improved reading partly reflective of a
return to marginal growth for manufacturing output," said Cheryl Paradowski, president and chief executive officer, PMAC. "Meanwhile, new order and employment expansion rates both weakened over
the month, with the rate of job creation, in particular, the slowest
since January 2012."
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.
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 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,
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 (more than $64 million in
donations, and $31 million in sponsorships).
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: "Canada's manufacturing sector registers marginal improvement in January (CNW Group/RBC)". Image available at: http://photos.newswire.ca/images/download/20130201_C2303_PHOTO_EN_23188.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