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The Globe and Mail

Canadian manufacturing picks up momentum in August: survey

Rick Keleher picks up moulded bricks of raw material before they are flash moulded at ABS Friction brake pad manufacturing facility in Guelph, Ont., on June 9, 2014.

Pawel Dwulit/The Globe and Mail

Canada's manufacturing sector gained momentum in August with overall conditions improving at the fastest past since last November, according to the RBC Canadian manufacturing purchasing managers' index.

The monthly survey says the index registered 54.8 in August, up from 54.3 in July and above the neutral 50.0 value.

Alberta and British Columbia recorded the most improvement, while Canadian manufacturers on the whole benefited from the strengthening U.S. economy, the index indicated.

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The survey found that manufacturers had the sharpest increases in output and new orders since November, 2013.

The latest survey also highlighted that employment numbers rose for the seventh month in a row, and at the strongest rate since September, 2013.

The report also said the August data pointed the biggest increase in new work from outside Canada since March, with a number of those surveyed saying the rise was due to more spending by customers in the U.S.

It also provided positive news on inflation, with average input prices increasing at their slowest pace since last December.

"The momentum in Canada's manufacturing sector is clearly being sustained with the index registering the ninth consecutive month of improvement," RBC chief economist Craig Wright said in a statement.

"We expect that Canadian manufacturers will continue to directly benefit from the strengthening U.S. economy, which has made and will continue to make positive strides."

The RBC's Canadian manufacturing purchasing managers' index is based on such factors as new orders, output, employment and stock of items purchased.

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