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Canadian manufacturing business conditions stagnated in April after contracting in March for the first time since data collection began in October 2010, according to the Royal Bank of Canada’s Canadian manufacturing purchasing managers’ index. April’s reading of 50.1 is only slightly above the 50.0 no-change mark but an improvement from March’s survey-low reading of 49.3. The RBC PMI is a monthly survey conducted in association with Markit, a financial information services company, and the Purchasing Management Association of Canada.
“Despite the RBC PMI rising from a survey low in March, it was much weaker than the series average and suggests that the Canadian manufacturing sector stagnated in April,” said Cheryl Paradowski, president and CEO of the Purchasing Management Association of Canada. “A return to growth for new orders, partly reflecting a modest rise in new export work, may lead to an increase in production over the coming months. In the meantime, manufacturers’ profitability is protected to some extent by output charges rising at a faster rate than input costs.”
Employment in Canada’s manufacturing sector was broadly unchanged in April, as indicated by the employment index posting only marginally above the 50.0 no-change mark. The index logged the second-lowest reading since data collection began, behind a sub-50 reading in January 2012. Employment growth was recorded in two of the four regions, with the strongest increase posted in Quebec.
The RBC PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 industrial companies.