The Royal Bank of Canada’s Canadian manufacturing purchasing managers’ index fell to a reading of 47.5 in December, below the neutral 50.0 value in December for the fifth consecutive month, reflecting the sharpest deterioration in overall conditions since October 2010.

The index fell to a reading of 47.5 in December from 48.6 in November. The latest PMI reading was the lowest in more than five years of data collection, largely reflecting weaker contributions from the output, new orders and employment components.

“Business conditions in the Canadian manufacturing sector fell at a survey-record pace in December as weaker domestic demand and ongoing uncertainty in the energy sector continues to take its toll,” said Craig Wright, senior VP and chief economist at the Royal Bank of Canada. “Across Canada, Alberta and British Columbia experienced the sharpest deterioration in conditions, while Ontario continued to be a national bright spot, posting a sustained rise in output production. As the US economy strengthens, we expect to see improvements in Canadian manufacturing sector activity levels.”

The RBC PMI is a monthly survey conducted in association with Markit, a financial information services company, and the Supply Chain Management Association. It is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 industrial companies.