RBC Canadian Purchasing Managers’ Index Indicates Weaker Growth
A newly launched index in Canada is the RBC (Royal Bank of Canada) Canadian Manufacturing Purchasing Managers’ Index (RBC PMI) which is similar to the ISM Manufacturing Index in the United States.
The RBC PMI came in at 54.8 in May, down from the prior month’s 56.3. Like the ISM index any reading above 50.0 signals expansion in the Canadian manufacturing sector.
According to the RBC PMI press release:
“Business conditions in the Canadian manufacturing sector improved at a slower pace in May. This reflected weaker expansion of both output and new orders. However, job creation remained solid and broadly similar to that registered during the previous survey period. Suppliers' delivery times lengthened further, while input prices rose at a marked rate during May.
‘The overall index fell slightly during May with declines evident across most of the key components and across all of the regions," said Craig Wright, Senior Vice President and Chief Economist, RBC. "This aligns with our outlook for a moderation in Canadian economic growth in the second quarter of the year after a robust start to the year.’"Companies monitored by the Index reported a wide range of price increase inputs during the month of May. According to the RBC press release, “Steel and oil were particularly mentioned by panelists.”
Regional manufacturing business conditions improved across all four monitored broad regions in May. PMI data indicated the strongest improvement was in Alberta and British Columbia.
Manufacturers based in Quebec recorded the fastest rate of new order growth.
Meanwhile, Alberta and British Columbia posted the strongest rate of job creation in May.
Ontario registered the largest increase in input costs during May. Similarly, monitored companies based in this region also raised their output prices the most.
(Source: RBC PMI)