New order growth strengthens RBC PMI to nine-month high
by Canadian Manufacturing Daily Staff
GDP climbs, Industrial Product Price Index stays stagnant from April to May
Toronto—A new RBC survey found the nation’s manufacturing sector saw strong improvement in business conditions over the month of June.
The monthly RBC Canadian Manufacturing Purchasing Managers’ Index (PMI) recorded its strongest improvement since September 2011, hitting 54.8 from 54.7 in May.
According to RBC, the average PMI reading in the second quarter of 2012 was 54.3, up from 51.6 in the first three months of the year.
Both output and new orders rose strongly over the month, according to the survey, with firms generally citing higher demand from clients.
Canadian manufacturers received a larger volume of new orders in June, with approximately 37 per cent of survey respondents reporting an increase in new work intakes since May.
18 per cent recorded a decline.
Overall, the rate of new order growth was strong and the fastest since last September.
New export orders also increased for the fourth consecutive month.
Manufacturing employment increased for the fifth successive month in June, while the rate of input price inflation slowed sharply to its weakest pace since data collection began in October 2010.
GDP up, IPPI unchanged
The Industrial Product Price Index (IPPI) remained unchanged from April to May, according to a StatsCan report, while the gross domestic product (GDP) rose slightly.
Real gross GDP grew 0.3 per cent in April after edging up 0.1 per cent in March, according to StantsCan numbers.
Most of the April increase was attributable to mining and oil and gas extraction, with wholesale trade contributing, albeit slightly less.
Transportation services, agriculture, forestry, fishing and hunting sectors increased, while retail trade, manufacturing and accommodation and food services declined.
Motor vehicles and other transportation equipment (+1 per cent) and lumber and other wood products (+1.7 per cent) were among the product groups that experienced growth in the IPPI rating.
RMPI still dropping
The Raw Materials Price Index (RMPI) posted its fourth straight decline in May, falling one per cent for the month.
All major product groups except one were down.
Previously, the index had experienced decreases of 1.6 per cent in March and two per cent in April.
The RMPI’s decline was mostly due to mineral fuels (-2.1 per cent), particularly crude oil (-2.2 per cent).
More modest downward pressure was exerted on the index by vegetable products (-0.7 per cent) and non-ferrous metals (-0.2 per cent).