Manufacturing business conditions in Canada decreased in March compared with the previous month, according to RBC Purchasing Managers’ Index (PMI) figures released this morning.
The RBC PMI is a composite figure used to measure trends in the Canadian manufacturing sector, and takes into account output, new orders, employment, inventories, prices and supplier delivery times.
Nationwide, the PMI dipped below the 50.0 no-change mark that separates expansion from contraction, representing the first decline in conditions since RBC started collecting data in October 2010.
British Columbia and Alberta experienced the greatest deterioration in manufacturing business conditions in March, with a PMI of 47.3. These two provinces were also the only ones with reported job losses; all other provinces saw employment growth in the manufacturing sector.
“The deterioration in the Canadian manufacturing measure is surprising in the face of improving growth in both the U.S. and various emerging economies,” said Craig Wright, RBC senior vice-president and chief economist.
“However, uncertainty about resolving fiscal imbalances in the U.S. – with sequestration going ahead March 1 – and in the Euro area may have weighed on sentiment.
“This weak spot should be short-lived, however, as we expect that global demand for Canadian exports will recover, providing a welcome boost for domestic manufacturers.”
