TORONTO, (Reuters) - The pace of growth in the Canadian manufacturing sector edged down to its slowest rate in four months in May as new order activity stagnated, data showed on Monday.
The RBC Canadian Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, declined to a seasonally adjusted 52.2 last month from 52.9 in April.
A reading above 50 shows growth in the sector, though May’s reading was the lowest level since January. The index was also below its historical average of 53.3.
The report “indicates that Canada’s manufacturing sector is still being held back by sluggish global growth,” said Craig Wright, chief economist at RBC.
“As we move forward, support for the sector is expected, given easing economic uncertainty, improving growth prospects in the U.S. and a more competitive currency.”
The forward-looking new orders index was unchanged at 52.6. The employment measure nudged up to 52.4 from 52.0, boding well for May’s more comprehensive employment report due at the end of the week.
Input costs eased further from March’s near three-year high, though the gauge remained strong at 64.4. Firms cited factors including higher prices for imported raw materials, and greater transportation and energy costs.
Reporting by Leah Schnurr, Editing by Chizu Nomiyama