* PMI falls to 53.05 in July from 54.85 in June
* Index declines for first time since Jan
* Pace of new export order growth falls sharply
* Slowing global growth hurts demand
* Input prices reading lowest in survey's 22-mth history
By Jon Cook
TORONTO, Aug 1 Canadian manufacturing growth
slowed sharply in July, with output and new order gains well
down from June, as deteriorating global economic conditions
cooled factory activity in Canada.
The RBC Canadian Manufacturing Purchasing Managers' Index,
released on Wednesday, slipped to 53.05 in July from 54.85 a
month earlier. It was the index's first decline in six months
and weakest reading since hitting 52.43 in March.
The manufacturing gauge, however, remained above the
50-point mark that separates expansion from contraction.
"Canada's manufacturing sector continued to grow in July,
albeit at a slower pace, suggesting global growth worries are
weighing on the economy," Craig Wright, chief economist at Royal
Bank of Canada, said in a statement.
The RBC report comes on the heels of Statistics Canada data
on Tuesday that showed Canada's economy grew by a
less-than-expected 0.1 percent in May from April, hurt by
unexpected weakness in the manufacturing sector.
Demand for Canadian exports has been hurt by slowing growth
in the United States - its largest trading partner - as well as
China and Europe.
The RBC PMI data revealed both output and new orders among
manufacturers significantly lagged June totals, slipping to
their lowest levels in four months. Slumping demand from abroad
was a key contributor, with the index of new export orders
falling more than four points.
European debt turmoil and a choppy U.S. recovery have forced
the Bank of Canada to keep its main policy rate at 1 percent for
nearly two years now.
Canadian manufacturers also suffered from a surging Canadian
dollar in July, which climbed within striking distance
of parity versus the U.S. currency after hitting a 2012 low in
The RBC report showed manufacturing employment in Canada
increased for the sixth successive month in July. However the
jobs component of the broader index slipped to 54.1 from 54.62
in June -- showing hiring growth slowed.
Input prices also fell in July for the first time since the
survey began in October 2010, as respondents reported lower
prices for raw materials. Meanwhile, output charges rose for the
fourth consecutive month.