RBC mfg index hits 21-month low in Jan. 2015

Feb. 4, 2015 – A monthly gauge of the Canadian manufacturing sector hit its lowest level in nearly two years last month, dropping to 51. According to the RBC Canadian manufacturing Purchasing Managers’ Index (PMI), this signals that manufacturers expect only a marginal improvement in business conditions at the start of 2015.

That contrasts to an optimistic view in late 2014, prior to a sudden collapse in crude oil prices over the past 2 1/2 months, noted RBC.

A measure above 50 on the PMI indicates the manufacturing sector is expanding.

The index hit 55.3 in last October and November — the highest since November 2013 — and remained elevated at 53.9 in December 2014.

The January decline to 51 marked the lowest level for the index since April 2013.

Statistics Canada reported last week that weakness in the Canadian manufacturing sector was a primarily reason for an unexpected decline in the country’s gross domestic product, which declined by 0.2 per cent from October.

— With files from The Canadian Press