January 2, 2018 / 2:33 PM / a year ago

Canada manufacturing growth rises in Dec on output, new orders

FILE PHOTO: Workers on automated systems at the Hudson's Bay Company distribution centre in Toronto, Ontario, Canada May 29, 2017. REUTERS/Fred Thornhill/File Photo

OTTAWA, Jan 2 (Reuters) - The pace of growth in the Canadian manufacturing sector picked up at the end of last year as companies boosted their operating capacity amid an increase in backlogs of work and new orders, data showed on Tuesday.

The Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 54.7 in December from 54.4 the previous month. A reading above 50 shows growth in the sector.

The measure of output rose to 54.1 from 53.7, while new orders increased to 54.6 from 53.9. Companies said the increased demand was partly due to spending in the energy sector, which is recovering from the oil price crash more than two years ago.

New orders for exports also saw modest growth, rising to 50.6 from 49.4, with manufacturers pointing to improving global economic conditions.

Meanwhile, backlogs of work continued to grow, with the index at a nearly three-and-a-half-year high of 52.4 from November’s 51.8.

Manufacturers were somewhat upbeat about the year ahead with 36 percent of those surveyed expecting output volumes to rise in 2018, compared to 7 percent who anticipate a decline.

Reporting by Leah Schnurr, Editing by Chizu Nomiyama;

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