Manufacturing sector gains momentum
February 2, 2018
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The pace of growth in the Canadian manufacturing sector picked up at the start of the year to its highest level in nine months as measures of new orders and employment rose in January, data showed on Thursday.
According to Reuters, the Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 55.9 last month from 54.7 in December.
It was the index’s highest level since April 2017. A reading above 50 shows growth in the sector.
New orders rose to 56.4 from 54.6 on increased demand from both domestic and overseas clients. New export orders rose to 53.3 from 50.6.
Employment rose to 55.9 from 54.8, the highest level since August as companies ramped up capacity. Canada’s job market has seen robust growth in the past year, sending the unemployment rate to a 41-year low.
However, input costs rose with manufacturers having to pay more for metals and oil-related items. Input prices rose to 65.1 from 61.1.
Still, the growth in the manufacturing sector could bode well for the Canadian economy, which was unexpectedly strong in 2017. Data on Wednesday showed economic growth accelerated in November, likely keeping the central bank on track to raise interest rates again before long.