* PMI falls to 52.8 in June from 54.8 in May
* Index down for third month
* Export orders decline
* Second publication of new factory index
By Claire Sibonney
TORONTO, July 4 The pace of Canadian
manufacturing activity growth fell for a third straight month
in June as both production and new order volumes slowed,
according to data released on Monday.
The RBC Canadian Manufacturing Purchasing Managers' Index,
launched last month and produced by research firm Markit, fell
to 52.8 in June from 54.8 in May.
The latest reading was above the level of 50 that separates
growth from contraction, and signaled that overall business
conditions are still modestly improving.
The PMI is produced with input from the Purchasing
Management Association of Canada. Data collection from some 400
companies, small and large, began in October 2010.
Business conditions within the Canadian manufacturing
sector did slightly better in June. This reflected new order
and output growth, although both weakened since May.
"The moderation is consistent with the trends we are seeing
around the globe pointing to a temporary soft patch in the
economic recovery," Craig Wright, chief economist at Royal Bank
of Canada, said in statement.
Wright noted the weakness was spread broadly across all of
the survey components and across the Canadian regions.
New export business fell during the latest survey period,
with firms attributing the decrease to soft global demand and a
strong Canadian dollar. The currency has traded above the
one-for-one level with the U.S. dollar since February.
The report showed employment in the manufacturing sector
increased for the ninth successive month in June. However, the
pace of job creation slowed since the previous survey period to
a seven-month low.
On the bright side, the rate of input price inflation
slowed to a six-month low in June, even as fuel and other
oil-related prices rose.
Canada's manufacturing sector has often dragged on the
country's economic recovery. Export-reliant manufacturers have
struggled with tepid U.S. demand and a strong domestic
currency, which has made their goods more expensive in foreign
"New work intakes from abroad fell during the latest survey
period, as the global economy showed further signs of
weakness," Cheryl Paradowski, chief executive at the Purchasing
Management Association of Canada (PMAC), said in a statement.
Data on Thursday showed Canada's manufacturing production
fell 0.7 percent in April following a robust 1.6 percent
increase in March, with most of the weakness stemming from the
auto sector. [ID:nN1E75T0ER]
(Editing by Jeffrey Hodgson)