Canada manufacturing PMI ekes out gain in January

Fri Feb 1, 2013 9:32am EST
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By Claire Sibonney

TORONTO (Reuters) - Canadian manufacturing activity grew at a snail's pace in January, according to data released on Friday that bolstered forecasts that the country's economy will get off to a sluggish start in 2013.

The RBC Canadian Manufacturing Purchasing Managers' Index was 50.5 last month after adjusting for seasonal variation, compared with 50.4 in December, when the index matched its the weakest reading since data collection began in October 2010.

The index was still dangerously close to contraction, but held above the 50 mark that separates expansion from deterioration.

"The Canadian manufacturing sector experienced a relatively lackluster start to the new year amid ongoing global economic uncertainty," Craig Wright, chief economist at Royal Bank of Canada, said in a statement.

"As some of the more extreme downside risk scenarios look less likely now, we should see confidence in the global economy improve, paving the way for a stronger recovery in Canadian manufacturing."

Recent data suggested growth in emerging economies such as China's has picked up and fears of a collapse of the euro have been calmed by the European Central Bank. Still, market players have remained on edge about the outlook for the global economy, and whether United States, Canada's biggest trading partner, can overcome its political wrangling.

The PMI data showed output rose for the first time in three months in January, albeit only marginally, while new order growth slowed slightly.

The rate of job creation also fell to a 12-month low, and input price inflation rose at its fastest clip since September.   Continued...

Bombardier employees install parts on a Global 6000 aircraft at the manufacturing facilities in Toronto May 29, 2012. REUTERS/ Mike Cassese