Canada manufacturing sector shows strong improvement in October

01 November 2013 15:46  [Source: ICIS news]

TORONTO (ICIS)--Canada's manufacturing sector grew at the fastest pace for 2 1/2 years in October, an economist at Royal Bank of Canada (RBC) said on Friday, citing the bank's monthly purchasing managers' index (PMI) survey.

The RBC PMI index rose to 55.6 in October, from 54.2 in September. Readings above 50.0 indicate an expansion in manufacturing. RBC publishes the survey in cooperation with Canada’s Supply Chain Management Association (SCMA) and a market research group.

"Canada's manufacturing sector experienced a significant jump in October - a sign that global economic momentum is continuing to improve," said RBC chief economist Craig Wright.

"Firmer global growth should boost external demand going forward,” Wright said.

“This pickup in demand for Canadian exports will no doubt augur well for Canadian manufacturers in the foreseeable future,” he added.

Regionally, the provinces of Alberta, which is home of much of Canada’s petrochemicals and energy industry, and British Columbia posted the strongest improvements in manufacturing conditions in October, the Toronto-based bank said. The two provinces also recorded the strongest rate of job creation.

New order growth accelerated across most Canadian regions, with the exception of Quebec where it eased slightly.

SCMA's CEO, Cheryl Paradowski, added: "Canada's manufacturing sector started the fourth quarter in spectacular fashion, seeing the strongest expansion for two-and-a-half years.”

“Greater client demand, both domestically and in key export markets such as Europe, drove new orders up at the fastest pace since April 2011," she added.

In related news, the US Institute for Supply Management reported on Friday that the pace of US manufacturing activity reached its highest level for this year and the best performance since March 2011.

Additional reporting by Joe Kamalick in Washington

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

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