October 1, 2014 / 1:54 PM / in 3 years

Canada manufacturing growth cools in September

Outerwear ready for shipping is seen packed in boxes on the manufacturing floor of Canada Goose's facility in Toronto January 17, 2012.Fred Thornhill

TORONTO, Reuters - The pace of growth in the Canadian manufacturing sector cooled last month as production slowed and new orders for exports stalled, data showed on Wednesday.

The RBC Canadian Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, fell to a seasonally adjusted 53.5 in September, pulling back from the nine-month high of 54.8 seen in August. A reading above 50 shows growth in the sector.

Despite the dip, Canada's manufacturing sector continued to show strength, said Craig Wright, chief economist at RBC.

"As we progress into the final months of 2014, we expect a further strengthening in the U.S economy will augment Canadian exports and set the stage for solid manufacturing business conditions overall," he said.

Output slowed to 53.6 from 56.5, while new orders hit a four-month low at 53.7.

While companies generally pointed to improving business conditions and greater demand from clients, some cited weaker export sales at their plants. The gauge of new export orders flatlined at 50.

Input prices rose to 58.6 but remained well below 2014's average so far of 62.4.

Reporting by Leah Schnurr, Editing by Chizu Nomiyama

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