Canadian manufacturing PMI growth slips for fifth straight month

Mon Dec 3, 2012 9:31am EST
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By Claire Sibonney

TORONTO (Reuters) - Canadian manufacturing growth slowed for a fifth straight month in November and hit a more than two-year low, according to data released on Monday, signaling the third quarter's disappointing economic performance may persist for the rest of the year.

The RBC Canadian Manufacturing Purchasing Managers' Index was 50.38 last month, compared with 51.39 in October. It was the weakest reading since data collection began in October 2010, and came dangerously close to contraction.

Still, the index was slightly above the 50 mark that separates expansion from deterioration.

"Minimal growth in the manufacturing sector in November likely reflects the continued global economic uncertainty," Craig Wright, chief economist at Royal Bank of Canada, said in a statement.

"We expect the economic weak patch to be short-lived, however. As the downside risks plaguing the global economy start to ease, so will some of the weight on Canadian export demand and the broader manufacturing sector."

The data showed manufacturing production and new orders both fell, pushing overall activity in the manufacturing sector closer to negative territory. Employers did create jobs in November, the report said, but the pace of growth slowed to a seven-month low.

"November was one of the most difficult months for Canadian manufacturers in the past two years," said Cheryl Paradowski, chief executive at the Purchasing Management Association of Canada, which helps source the data. "This reflected weaker domestic and export market conditions. Nonetheless, firms continued to hire additional staff."

Q3 GROWTH FIZZLES   Continued...