August 1, 2019 / 1:57 PM / 4 months ago

Canada factory activity expands for first time in four months

FILE PHOTO: Workers are seen at at Bri-Steel Manufacturing, a manufacturer and distributer of seamless steel pipes, in Edmonton, Alberta, Canada, June 21, 2018. Picture taken June 21, 2018. REUTERS/Candace Elliott

TORONTO, (Reuters) - Canadian manufacturing activity expanded for the first time in four months in July as a measure of output rebounded from a three-and-a-half year low, data showed on Thursday.

The IHS Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 50.2 last month from 49.2 in June.

A reading above 50 shows growth in the sector.

The measure of output rose to 49.7 after it fell to 47.7 in June, its lowest level since December 2015.

Still, the data showed a decline in new work received from abroad. The new export orders measure fell to a four-month low at 48.0 from 50.0 in June.

“External demand conditions remain the main concern for the manufacturing sector,” said Tim Moore, economics associate director at IHS Markit. “There were widespread reports that global trade frictions and softer economic growth in key markets had held back export sales.”

The Bank of Canada worried about the risks trade wars posed to the global economy as it left its benchmark interest rate on hold last month at 1.75%.

Reporting by Fergal Smith; editing by Susan Thomas

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