Canadian manufacturers’ outlook dims in June: RBC survey
Coincides with the suspension of oil sands production because of Alberta wildfires.
TORONTO — RBC’s monthly survey of purchasing managers suggests the outlook for Canada’s manufacturing sector has become slightly less positive than it was in May.
The RBC Canadian manufacturing PMI index registered 51.8 in June, down from 52.1 in May.
It was the fourth month in a row for the index to register more than 50.0, signalling that purchasing managers at Canadian manufacturing companies see signs of expansion in the coming months.
But RBC says June’s index had the weakest national reading since March, which marked a return to business confidence after seven months of declining sentiment.
“This weakening has coincided with the suspension of oil sands production in the face of wildfires through much of Alberta that is expected to send overall GDP growth into negative territory in the second quarter,” RBC said in a commentary.
“That said, there has not been a noticeable further weakening in the relevant regional numbers. The more likely cause of the recent weakening trend in the PMI is the stall in export growth.”
Of the four regional breakdowns compiled by the bank, three indicated expansion. The weakest reading was for Alberta and B.C., at 46.2 – the highest so far in 2016.
The two regions with Canada’s biggest manufacturing sectors, Ontario and Quebec, showed declines. Ontario’s index dropped to 53.6 from 55.1 in May and Quebec’s dropped to 54.6 from 55.7. The rest of Canada rose to 57 from 56.6.
The bank has been publishing the index in partnership with the Supply Chain Management Association but says the June report is the last that will be sponsored by RBC.