RBC PMI™ climbs to two-and-a-half year high in October

TORONTO, Nov. 1, 2013 /CNW/ - Canada's manufacturing sector grew at the 
fastest pace for two-and-a-half years in October, 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. 
After adjusting for seasonal variation, the RBC PMI - a composite indicator 
designed to provide a single-figure snapshot of the health of the 
manufacturing sector - rose to its highest level in 30 months during October. 
At 55.6, up from 54.2 in September and above the series average of 53.3, the 
RBC PMI indicated a strong improvement in Canadian manufacturing operation 
The RBC PMI found that both output and new orders increased at the strongest 
rates since April 2011, which manufacturers generally attributed to greater 
client demand. Concurrently, firms continued to take on more staff, although 
the rate of job creation eased slightly from September's 15-month peak. 
Meanwhile, inflationary pressures strengthened, with the latest rise in input 
costs the greatest since March. 
"Canada's manufacturing sector experienced a significant jump in October - up 
to 55.6 from 54.2 in September - a sign that global economic momentum is 
continuing to improve," said Craig Wright, senior vice-president and chief 
economist, RBC. "Firmer global growth should boost external demand going 
forward; this pickup in demand for Canadian exports will no doubt augur well 
for Canadian manufacturers in the foreseeable future." 
The headline RBC PMI reflects changes in output, new orders, employment, 
inventories, prices and supplier delivery times. 
Key findings from the October survey include: 

    --  output increases at fastest rate since April 2011;
    --  strong rise in total new orders, with new export work also
        rising over the month; and
    --  employment growth remains solid.

The volume of new orders received by Canadian manufacturers increased further 
in October. Firms generally attributed this to greater client demand in both 
domestic and international markets, with new export work also rising since 
September. Overall, total incoming new work rose strongly over the month, and 
at the second-strongest pace since data collection began in October 2010.

Reflective of higher new order requirements, firms raised production for the 
sixth consecutive month in October. Moreover, the latest rise in output was 
strong and the fastest for two-and-a-half years. Nonetheless, backlogs of work 
increased for the second month running, while stocks of finished goods were 
depleted only slightly.

Manufacturers bought a larger quantity of inputs in October, with the latest 
rise in buying activity the strongest since September 2011. Some of the 
increase in purchases was held back in stock, with input inventories rising 
modestly over the month. Meanwhile, suppliers' delivery times lengthened 
further in the latest survey period, as vendors were generally busier. The 
latest increase in lead times was the greatest for 16 months.

Employment in Canada's manufacturing sector rose for the twenty-first 
successive month in October. Approximately 16 per cent of surveyed firms hired 
additional staff over the month, often linking this to higher new order 
volumes. Overall, the rate of job creation was solid, despite having eased 
from September's peak.

Input costs faced by Canadian manufacturers continued to rise in October, with 
firms commonly reporting higher fuel and raw material prices, including steel 
and packaging. Although the overall rate of inflation was the fastest in seven 
months, it nonetheless remained weaker than the series average.

Meanwhile, companies passed on greater costs to clients by raising their 
output charges. Average selling prices rose solidly and at the strongest pace 
since August 2011.

Regional highlights include:
    --  Alberta and British Columbia continued to post the strongest
        improvement in manufacturing business conditions in October.
    --  New order growth accelerated across most Canadian regions, with
        the exception of Quebec where it eased very slightly.
    --  The strongest rate of job creation was recorded for Alberta and
        British Columbia.
    --  The weakest rate of input price inflation was posted in

"Canada's manufacturing sector started the fourth quarter in spectacular 
fashion, seeing the strongest expansion for two-and-a-half years. Greater 
client demand, both domestically and in key export markets such as Europe, 
drove new orders up at the fastest pace since April 2011," said Cheryl 
Paradowski, president and chief executive officer, SCMA. "The improvement in 
manufacturing business conditions resulted in building supply chain pressures, 
as evidenced by the strongest increase in input prices in seven months and 
suppliers' delivery times lengthening to the greatest extent since June 2012."

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 
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 Emailcferguson@scmanational.ca 
Markit Mark Wingham, Economist Telephone +44-1491-461-004 
Rachel Harling, Corporate Communications Telephone +001-917-441-6345 / 
+001-646-351-3584 Emailrachel.harling@markit.com 
Image with caption: "RBC Canadian Manufacturing PMI™ - Canada's 
manufacturing sector grows at fastest pace in two-and-a-half years in October 
(CNW Group/Markit)". Image available at:  
To view this news release in HTML formatting, please use the following URL: 
CO: Supply Chain Management Association
ST: Ontario
-0- Nov/01/2013 13:30 GMT
Press spacebar to pause and continue. Press esc to stop.