Reuters reported the pace of growth in Canadian manufacturing eased slightly from July 2012 to hit a five month low in August 2012, though more export work from the United States helped lift new orders.
The RBC Canadian Manufacturing Purchasing Managers' Index was 53.04 in August 2012 as compared with 53.05 in July 2012. This was the weakest reading since March 2012 and also below the series average of 54.2.
Still, a reading above 50 indicated improvement in the country's manufacturing conditions.
Mr Craig Wright, chief economist at Royal Bank of Canada, said in a statement that "In contrast to declining manufacturing conditions around the world, particularly in the US, euro area and China, the Canadian manufacturing sector is continuing to grow, albeit at a moderately slower pace."
Manufacturers saw a greater volume of new orders in August 2012, due to higher demand from both Canadian and foreign markets, though the rate of growth was weaker than average. The index for new export orders was above 50 for a sixth straight month and rose from July 2012, with manufacturers citing greater demand, particularly from the United States, as a factor.
Employment in the manufacturing sector was positive for the seventh month in a row, with roughly 18% of companies hiring new staff, but the pace of growth in job creation was at its slowest since April 2012.
Mr Wright said the hiring provided "a favorable early indication in advance of the broader Canadian employment report due out on Friday."
Canada's economy has expanded at a steady but tepid pace in recent quarters. Data showed it grew at an annualized 1.8% in the second quarter, matching revised first-quarter growth figures, helped by strong investment by companies in new machinery, equipment and buildings. Uncertainty in Europe over the region's debt crisis and a sluggish recovery in the United States have weighed on sentiment.
According to a Reuters poll of global forecasters, the Bank of Canada has kept its main policy rate at 1% for nearly two years now and is expected to keep the rate unchanged on Wednesday.
Source - Reuters
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