Manufacturing sector rebounds in June to highest level this year: RBC report

TORONTO – Canada’s manufacturing sector showed signs of a solid rebound in June, according to a monthly survey by Royal Bank.

Following disappointing readings over the past two months due to a harsh winter, the RBC manufacturing purchasing manager’s index came in at its highest level so far this year at 53.5 in June, up from 52.2 in May.

A reading higher of 50 indicates growth.

RBC attributed the gain to stronger output rates and new business expansion.

“The latest RBC PMI data indicates that in June, Canada’s manufacturers experienced the best conditions for growth in half a year,” said Craig Wright, senior vice-president and chief economist at RBC.

“We expect that those conditions will further improve going forward supported by a strengthening global economy, increases in external demand for domestic goods and a depreciating Canadian dollar.”

The survey said that manufacturing output grew from May, which was a nine-month low, mainly due to greater client spending and new product launches. Business growth was also helped by stronger domestic and U.S. demand. It also noted that payrolls expanded at a good pace in June, rising to 52.6 in June, up slightly from 52.4 in May.