Manufacturing “immune” to rise in economic uncertainty, report says

The Canadian manufacturing sector has proven to be relatively immune to the rise in global economic uncertainty and weaker economic growth around the globe, according to a new report from the Conference Board of Canada.

 That’s one of the only bright spots in the Board’s Leading Indicator of Industry Profitability report, which also found that the profitability outlook for Canadian industries declined in June, falling 0.2 per cent for the second consecutive month. The biggest decline was in the oil industry, the report found, as the price of oil dropped significantly.

But the good news for manufacturers is that despite a decline in the Conference Board of Canada’s Index of Business Confidence in the second quarter of 2012, manufacturing activity continued to grow in that period.

In June, the RBC Canadian Manufacturing Purchasing Managers’ Index grew to an average reading of 54.3 over the second quarter, compared with 51.6 in the first quarter. (An index reading higher than 50 indicates expansion.) The numbers come despite a contraction in manufacturing activity in Europe, China and the U.S.

The growth in the manufacturing sector resulted in a brighter profit outlook for several manufacturing industries, including the transport equipment manufacturing industry (up 1.2 per cent), auto manufacturing, auto parts, chemicals products, plastic and rubber products, machinery, food and beverages, non-metallic mineral products, furniture, pharmaceutical products, and even paper products.