Canada manufacturing growth cools in April

TORONTO Thu May 1, 2014 9:30am EDT

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TORONTO May 1 (Reuters) - The pace of growth in the Canadian manufacturing sector cooled slightly in April as new orders slowed, though employment rose to its strongest level in five months, data showed on Thursday.

The RBC Canadian Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, slipped to a seasonally adjusted 52.9 last month from 53.3 in March. A reading above 50 shows growth in the sector.

Weather-related supply chain disruptions persisted in April, leading to longer delivery times and a rise in backlogs of work, the report said.

The forward-looking new orders gauge fell to 52.6 from 53.4, while new export orders edged down to 51.6 from 52.4.

The employment measure rose to 52 from 50.8, its highest level since November and boding well ahead of next week's larger unemployment report for April.

Despite the dip in growth, the continued expansion of the sector remains encouraging, said Craig Wright, chief economist at Royal Bank of Canada.

"Our bottom line continues to be that a strengthening U.S. economy, alongside a more competitive Canadian dollar, will support improving conditions for Canada's manufacturers in the near-term," Wright said in a statement.

While a weaker Canadian dollar could help some manufacturers be more competitive, the lower currency continued to push input costs higher. Still, the pace of the increase moderated, with the input prices index easing to 66.2 from 68.2.

(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)

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