Reuters reported that Canadian manufacturing growth rebounded in December 2011 after a two month decline as both new orders and output jumped, suggesting a slowdown in the last quarter of 2011 may not be as severe as many feared.

The RBC Canadian Manufacturing Purchasing Managers' Index came in at 54.02 in December 2011, above the level of 50 that separates expansion from contraction, thought it still remained weaker than the series average.

The index, launched in 2011 by Royal Bank of Canada and produced by research firm Markit, rose from 53.31 in November 2011. The RBC PMI data have signaled improving business conditions in each month since the survey began in October 2010.

After drops in October 2011 and November 2011, new export orders also climbed in December 2011, while the rate of input price inflation eased further during the latest survey period, marking the slowest pace in the 15 month series history.

Mr Craig Wright chief economist at Royal Bank of Canada said that "The Canadian manufacturing sector has demonstrated its resilience as the global economy faces some strong headwinds. After some temporary setbacks in 2011, Canada's economy is set to grow by 2.5% in 2012, provided that European policymakers contain the sovereign debt crisis in that region."

Looking back to 2011, data last month showed Canada's economy stalled in October after four consecutive months of growth, pointing to a fourth quarter slowdown as increasing global uncertainty mutes expectations for 2012.

But the PMI survey showed new order volumes expanded in December and production was particularly robust. Output increased at the fastest rate since April. Stocks of finished goods were also depleted, while backlogs were reduced for the third month running.

Meanwhile, overall employment in Canada's manufacturing sector appeared to rise solidly as approximately 19% of firms hired additional staff, compared to 13% that cut jobs.

(Sourced from www.reuters.com)