* PMI falls to 52.4 in June from 53.2 in May
* Export activity supports, helped by orders in Europe
By John Tilak
TORONTO, July 2 Canada's manufacturing growth
slowed in June, pulling back from a sharp gain in May,
suggesting that sluggish global demand is still weighing on the
country's export-oriented economy.
The RBC Canadian Manufacturing Purchasing Managers' Index
retreated to 52.4 in June, after adjusting for seasonal
variation, from 53.2 in May. Despite the decline, the reading
was the second highest since September.
A reading above 50 shows growth in the sector.
The index was supported by expansion of output and new
orders, even though the pace of growth for both slowed from May.
"Canada's manufacturing sector continued to expand in June -
a sign that the slowdown earlier this year was in fact a
temporary blip," Craig Wright, chief economist at RBC, said in a
"Moving into the second half of 2013, an anticipated
strengthening in international demand will help the sector shake
off its relatively lackluster performance it has recorded over
the past year."
The data highlighted one of the Canadian economy's biggest
challenges, a tentative global economic recovery that puts
pressure on the country's exports.
Government figures released on Friday showed Canada's
economy grew by just 0.1 percent in April from March, confirming
that after a strong first quarter growth is slowing. The
manufacturing sector grew by only by 0.2 percent, Statistics
Global data also paints an uncertain picture, with signs of
a gradual recovery in the United States, a slow withdrawal from
a recession in Europe, and fiscal and growth challenges in
The PMI data on Tuesday showed stocks of finished goods were
depleted in June even though new orders grew at a slower place
than in May.
"A further rise in new orders, partly reflecting greater
client demand, continued to support growth of output and
employment in June," said Cheryl Paradowski, president and chief
executive officer at Purchasing Management Association of
Export activity was also positive, helped by new orders from
Europe. But rising input costs created more pressure on margins.
The rate of input price inflation gathered pace and hit a
Manufacturing conditions improved in most parts of Canada,
with Alberta and British Columbia being the exceptions, the
report said. Quebec showed a strong rise in output.