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."
Alberta and British Columbia continued to post the strongest improvement in manufacturing business conditions in October, including the strongest rate of job creation. New order growth accelerated across most Canadian regions, with the exception of Quebec where it eased very slightly. The weakest rate of input price inflation was posted in Ontario.
"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 headline RBC PMI reflects changes in output, new orders, employment, inventories, prices and supplier delivery times. The report is available at www.rbc.com/newsroom/pmi.