June 18, 2012
According to Reuters, the pace of growth in Canadian manufacturing advanced at its strongest rate of the year in April as business conditions improved for a third straight month, reflecting a slow but steady recovery in the export-reliant sector.
The RBC Canadian Manufacturing Purchasing Managers’ Index rose to a reading of 53.3 in April from 52.4 in March, above the 50 no-change mark that separates expansion from contraction.
According to Craig Wright, chief economist at Royal Bank of Canada, as the economy south of the border strengthens, the Canadian manufacturing sector will reap the benefits of increasing U.S. demand for Canadian exports such as cars, machinery, and lumber.
Also, the new export orders component of the index rose to its highest level since April 2011.
The report showed that Canadian manufacturers hired additional staff in April, though job creation was the slowest it had been in the last three months. It also stated that the rate of input price inflation was the highest since August 2011.
Cheryl Paradowski, chief executive at the Purchasing Management Association of Canada, cautioned that while the RBC PMI signaled the strongest growth this year, the reading was still below the series average.
Companies attributed much of the rise to greater client demand and new contracts, suggesting Canada’s manufacturing industry continues to make incremental strides, albeit with some interruptions.
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