August 2, 2016 / 1:39 PM / a year ago

Canadian manufacturing growth inches higher in July

Production Associates inspect cars moving along assembly line at Honda manufacturing plant in Alliston, Ontario March 30, 2015.Fred Thornhill

TORONTO (Reuters) - The pace of growth in Canadian manufacturing inched higher in July, data showed on Tuesday, as rising new orders and overall output offset a drag from export orders.

The RBC Canadian Manufacturing Purchasing Managers' Index (PMI), a measure of manufacturing business conditions, barely rose last month to a seasonally adjusted 51.9 from 51.8 in June.

"Greater demand from domestic sources helped to offset slower export sales in July, especially for manufacturers of consumer goods," said Tim Moore, senior economist at Markit, which compiles the monthly survey on behalf of Royal Bank of Canada.

The index of new export orders slipped to 48.4, below the 50 threshold that indicates growth and down from 50.2 in the previous month.

Those surveyed said subdued demand from across Asia played a role in the export slowdown.

The Bank of Canada is counting on non-energy exports to spur a broader economic recovery, but has been faced with a series of disappointments on that front in recent months.

Reporting by Alastair Sharp; Editing by Meredith Mazzilli; alastair.sharp@reuters.com; +1 416 941 8118; Reuters Messaging: alastair.sharp.thomsonreuters.com@reuters.net

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