RBC PMI™ rises to 15-month high in September, suggesting a solid manufacturing expansion in Canada

RBC PMI™ rises to 15-month high in September, suggesting a solid 
manufacturing expansion in Canada 
TORONTO, Oct. 1, 2013 /CNW/ - Canada's manufacturing expansion accelerated to 
a 15-month high in September, according to the RBC Canadian Manufacturing 
Purchasing Managers' Index™ (RBC PMI™). A monthly survey, conducted in 
association with Markit, a leading global financial information services 
company, and the Supply Chain Management Association (SCMA), the RBC PMI 
offers a comprehensive and early indicator of trends in the Canadian 
manufacturing sector. 
The seasonally adjusted RBC PMI - a composite indicator designed to provide a 
single-figure snapshot of the health of the manufacturing sector - rose to 
54.2 in September, up from 52.1 in August. This indicated further improvement 
in manufacturing business conditions, with the rate of growth above the series 
average and the fastest since June 2012. 
The RBC PMI found that both output and new order growth accelerated in 
September. In particular, the latest rise in total new work intakes was strong 
and the fastest since June 2012. This partly reflected the greatest increase 
in new export orders for two-and-a-half years. Meanwhile, the rate of job 
creation also quickened to a 15-month high, as firms hired additional staff to 
handle increased business activity. 
"The global economy is gaining traction, and, with that,we are 
seeingincreasing demand for Canadian exports - particularly from 
themanufacturing sector, whichhascontributed to thePMI reaching 
a15-month high in September," said Craig Wright, senior vice-president and 
chief economist, RBC. "While challenges in the sector remain, this rebound is 
encouraging. An anticipatedstrengthening inglobaleconomic growth, 
particularly in the U.S. which is Canada's largest trading partner,bodes 
well for manufacturing activity late this year and early next." 
The headline RBC PMI reflects changes in output, new orders, employment, 
inventories, prices and supplier delivery times. 
Key findings from the September survey include: 

    --  strongest rise in new orders since June 2012;
    --  employment increases at fastest rate for 15 months; and
    --  average selling prices rise for first time since May.

Incoming new work at Canadian manufacturers increased for the sixth 
consecutive month in September. Moreover, the rate of new order growth was 
strong and the fastest in 15 months. Firms generally cited new product 
launches, as well as greater demand, both domestically and in key export 
markets such as the United States. Concurrently, new export orders rose at the 
sharpest rate for two-and-a-half years in September.

Firms raised production in light of higher new order volumes. Output rose 
solidly over the month, and at the fastest rate since May. Nevertheless, 
outstanding business increased for the first time in four months and at the 
strongest pace for two years, while stocks of finished goods were broadly the 
same as in August.

The quantity of inputs bought by manufacturing companies increased for the 
sixth successive month in September. The rate of growth was solid and the 
strongest since August 2012. Stocks of purchases also increased, although the 
rate of accumulation was marginal.

Concurrently, suppliers' delivery times lengthened further in the latest 
survey period, with panellists suggesting that vendors were generally busier 
and had leaner inventories. Overall, the latest increase in lead times for 
inputs was solid and the greatest for 15 months.

Employment growth in the Canadian manufacturing sector accelerated to a 
15-month high in September. Approximately 17 per cent of firms hired 
additional staff since August, and generally attributed this to increased 
business activity.

Manufacturers faced higher input prices in September, with raw materials and 
transportation costs having increased over the month. That said, the overall 
rate of inflation eased slightly since August and was weaker than the series 
average. Firms passed on higher costs to clients by raising their selling 
prices. On average, output charges rose moderately and for the first time 
since May.

Regional highlights include:
    --  Manufacturing business conditions improved across all four
        regions, led by Alberta and British Columbia.
    --  New orders increased in Ontario, reversing a reduction one
        month previously.
    --  Alberta and British Columbia recorded the strongest rate of
        employment growth.
    --  Quebec saw the weakest increase in input prices in September.

"After a prolonged period of weakness, the Canadian manufacturing sector 
appears to be back on track with the RBC PMI rising above its series average 
to a 15-month high", said Cheryl Paradowski, president and chief executive 
officer, SCMA. "The main driver of the expansion was an increase in new 
orders, which in itself reflected the greatest rise in new export work since 
March 2011. Production levels were insufficient to fully meet new order 
requirements, with backlogs of work rising at the sharpest rate for two years."

The report is available at www.rbc.com/newsroom/pmi

Notes to Editors:

The RBC Canadian Manufacturing PMI™ Report is based on data compiled from 
monthly replies to questionnaires sent to purchasing executives in over 400 
industrial companies. The panel is stratified geographically and by Standard 
Industrial Classification (SIC) group, based on industry contribution to 
Canadian GDP.

Survey responses reflect the change, if any, in the current month compared to 
the previous month based on data collected mid-month. For each of the 
indicators the 'Report' shows the percentage reporting each response, the net 
difference between the number of higher/better responses and lower/worse 
responses, and the 'diffusion' index. This index is the sum of the positive 
responses plus a half of those responding 'the same'.

Diffusion indexes have the properties of leading indicators and are convenient 
summary measures showing the prevailing direction of change. An index reading 
above 50 indicates an overall increase in that variable, below 50 an overall 

The RBC Canadian Manufacturing Purchasing Managers' Index™ (RBC PMI™) is a 
composite index based on five of the individual indexes with the following 
weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers' 
Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the Delivery Times 
Index inverted so that it moves in a comparable direction.

The Purchasing Managers' Index (PMI) survey methodology has developed an 
outstanding reputation for providing the most up-to-date possible indication 
of what is really happening in the private sector economy by tracking 
variables such as sales, employment, inventories and prices. The indices are 
widely used by businesses, governments and economic analysts in financial 
institutions to help better understand business conditions and guide corporate 
and investment strategy. In particular, central banks in many countries 
(including the European Central Bank) use the data to help make interest rate 
decisions. PMI surveys are the first indicators of economic conditions 
published each month and are therefore available well ahead of comparable data 
produced by government bodies.

Markit does not revise underlying survey data after first publication, but 
seasonal adjustment factors may be revised from time to time as appropriate 
which will affect the seasonally adjusted data series. Historical data 
relating to the underlying (unadjusted) numbers, first published seasonally 
adjusted series and subsequently revised data are available to subscribers 
from Markit. Please contact economics@markit.com.

About RBC
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under 
the master brand name RBC. We are Canada's largest bank as measured by assets 
and market capitalization, and are among the largest banks in the world, based 
on market capitalization. We are one of North America's leading diversified 
financial services companies, and provide personal and commercial banking, 
wealth management services, insurance, and investor services and wholesale 
banking on a global basis. We employ approximately 80,000 full- and part-time 
employees who serve more than 15 million personal, business, public sector and 
institutional clients through offices in Canada, the U.S. and 44 other 
countries. For more information, please visit rbc.com.

RBC supports a broad range of community initiatives through donations, 
sponsorships and employee volunteer activities. In 2012, we contributed more 
than $95 million to causes worldwide, including donations and community 
investments of more than $64 million and $31 million in sponsorships.

About Supply Chain Management Association
As the leading and largest association in Canada for supply chain management 
professionals, the Supply Chain Management Association (SCMA) is the national 
voice for advancing and promoting the profession. SCMA sets the standard of 
excellence for professional skills, knowledge and integrity and was the first 
supply chain association in the world to require that all members adhere to a 
Code of Ethics.

With nearly 8000 members working across the private and public sectors, SCMA 
is the principal source of supply chain training, education and professional 
development in the country. Through its 10 Provincial and Territorial 
Institutes, SCMA grants the Supply Chain Management Professional (SCMP) 
designation, the highest achievement in the field and the mark of strategic 
supply chain leadership.

SCMA was formed in 2013 through the amalgamation of the Purchasing Management 
Association of Canada and Supply Chain and Logistics Association of Canada. 
With a combined history of more than 140 years, today the association embraces 
all aspects of strategic supply chain management, including: 
purchasing/procurement, strategic sourcing, contract management, 
materials/inventory management, and logistics and transportation. For more 
information, please visit scmanational.ca.

About Markit
Markit is a leading, global financial information services company with over 
3,000 employees. The company provides independent data, valuations and trade 
processing across all asset classes in order to enhance transparency, reduce 
risk and improve operational efficiency. Its client base includes the most 
significant institutional participants in the financial marketplace. For more 
information, see markit.com.

About PMIs
Purchasing Managers' Index™ (PMI™) surveys are now available for 32 
countries and also for key regions including the Eurozone. They are the most 
closely-watched business surveys in the world, favoured by central banks, 
financial markets and business decision makers for their ability to provide 
up-to-date, accurate and often unique monthly indicators of economic trends. 
To learn more go to markit.com/economics.

The intellectual property rights to the RBC Canadian Manufacturing PMI 
provided herein is owned by Markit Economics Limited. Any unauthorised use, 
including but not limited to copying, distributing, transmitting or otherwise 
of any data appearing is not permitted without Markit's prior consent. Markit 
shall not have any liability, duty or obligation for or relating to the 
content or information ("data") contained herein, any errors, inaccuracies, 
omissions or delays in the data, or for any actions taken in reliance thereon. 
In no event shall Markit be liable for any special, incidental, or 
consequential damages, arising out of the use of the data. Purchasing 
Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, RBC 
uses the above marks under licence. Markit and the Markit logo are registered 
trade marks of Markit Group Limited.

SOURCE  Markit 
Royal Bank of Canada Gillian McArdle, Head of Communications, Canada RBC 
Capital Markets Telephone +001-416-842-4231 
Emailgillian.mcardle@rbc.com  Elyse Lalonde, Communications Manager, 
Canada RBC Capital Markets Telephone +001-416-842-5635 
Emailelyse.lalonde@rbc.com  Supply Chain Management Association Cheryl 
Paradowski, President and CEO Telephone +001-416-542-9120 
Emailcparadowski@scmanational.ca  Cori Ferguson, Director, Public 
Affairs & Communications Telephone +001-416-542-9129 
Markit Mark Wingham, Economist Telephone +44-1491-461-004 
Emailmark.wingham@markit.com  Rachel Harling, Corporate Communications 
Telephone +001-917-441-6345 / +001-646-351-3584 
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CO: Supply Chain Management Association
ST: Ontario
-0- Oct/01/2013 13:30 GMT
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