A study by Canada's largest bank indicated Friday that Canadian manufacturers enjoyed a positive end to the first quarter, with production and overall new orders returning to growth after a sustained period of decline.
The seasonally-adjusted RBC Canadian Manufacturing Purchasing Managers' Index came in at 51.5 in March, up from 49.4 in February, above the critical 50.0 no-change threshold for the first time in eight months. Moreover, although pointing to only a moderate improvement in business conditions, the index was the highest since December 2014.
Stronger export demand drove much of the rebound in manufacturing conditions, with new work from abroad rising at the joint-fastest pace since November 2014. Survey respondents noted that exchange rate deprecation had encouraged greater focus on export markets, which helped to boost sales to U.S. clients in particular.
What is more, manufacturers continued to experience strong input price inflation as suppliers passed on higher imported raw material costs, in turn contributing to another solid rise in factory gate charges in March.
The headline RBC PMI reflects changes in output, new orders, employment, inventories and supplier delivery times.
