(Reuters) - Growth in the Canadian manufacturing sector accelerated in May to its fastest pace in more than seven years as new orders and inventories climbed, data showed on Friday.
The IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 56.2 last month, its highest since April 2011, from 55.5 in April.
A reading above 50 shows growth in the sector.
New orders rose to 57.6 from 55.7 in April, helped by the strongest pace of growth for new export orders in more than seven years, IHS Markit said.
“The combination of rising workloads and increased stock building bodes well for near-term output growth,” said Tim Moore, associate director at IHS Markit.
Stocks of purchases rose to 53.1, the highest since May 2012, from 51.3 in April, due to concerns about the availability of materials and efforts to guard against an anticipated rise in input prices, said IHS Markit.
Input prices climbed to the highest since March 2014 at 68.0 from 67.3 in April.
Reporting by Fergal Smith, Editing by Chizu Nomiyama