June 1, 2017 / 1:36 PM / 3 months ago

Canada manufacturing growth cools modestly in May

A Bombardier q400 airplane is seen being assembled at the Bombardier aircraft manufacturing facility in Toronto, November 25, 2010.Mark Blinch/File Photo

OTTAWA, June 1 (Reuters) - - The pace of growth in the Canadian manufacturing sector cooled slightly in May as new orders and output slowed, though demand for exports rose to the highest level in two-and-a-half years, data showed on Thursday.

The Markit Canada Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, fell to a seasonally adjusted 55.1 last month from 55.9 in April. A reading above 50 shows growth in the sector.

New orders declined to 55.7 from 57.6, while output declined to 54.3 from 55.8. Nonetheless, companies were optimistic about the stronger economy and said clients, particularly in the energy sector, were more willing to spend.

New orders for exports rose to 53.3 from 52.6, the highest level since November 2014 as companies saw more demand from the United States.

But backlogs of work rose to 52.0 from 51.0, suggesting companies were feeling pressure on their operating capacity. The measure of supplier delivery times also deteriorated, falling to 43.1 from 45.3 and indicating longer delivery times.

Reporting by Leah Schnurr, Editing by Chizu Nomiyama

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