* PMI rises to 50.5 in Jan from 50.4 in Dec
* Output up for first time in 3 months
* Slowest rate of job creation in 12 months
By Claire Sibonney
TORONTO, Feb 1 Canadian manufacturing activity
grew at a snail's pace in January, according to data released on
Friday that bolstered forecasts that the country's economy will
get off to a sluggish start in 2013.
The RBC Canadian Manufacturing Purchasing Managers' Index
was 50.5 last month after adjusting for seasonal variation,
compared with 50.4 in December, when the index matched its the
weakest reading since data collection began in October 2010.
The index was still dangerously close to contraction, but
held above the 50 mark that separates expansion from
"The Canadian manufacturing sector experienced a relatively
lackluster start to the new year amid ongoing global economic
uncertainty," Craig Wright, chief economist at Royal Bank of
Canada, said in a statement.
"As some of the more extreme downside risk scenarios look
less likely now, we should see confidence in the global economy
improve, paving the way for a stronger recovery in Canadian
Recent data suggested growth in emerging economies such as
China's has picked up and fears of a collapse of the euro have
been calmed by the European Central Bank. Still, market players
have remained on edge about the outlook for the global economy,
and whether United States, Canada's biggest trading partner, can
overcome its political wrangling.
The PMI data showed output rose for the first time in three
months in January, albeit only marginally, while new order
growth slowed slightly.
The rate of job creation also fell to a 12-month low, and
input price inflation rose at its fastest clip since September.
WEAK START TO 2013
The manufacturing figures came a day after government data
showed the Canadian economy grew by a faster-than-expected 0.3
percent in November.
The GDP number strengthened the outlook for the fourth
quarter of 2012, which economists had repeatedly downgraded
after a relatively strong first half of last year. The Bank of
Canada this month predicted annualized fourth quarter growth of
Canada performed better than most of its wealthy peers in
the wake of the 2007-09 global financial crisis, leading the
Bank of Canada in 2010 to become the first central bank in the
Group of Seven to hike interest rates after the recession.
The bank has forecast a sluggish start to 2013, but said
growth will gather momentum throughout the year as business
investment and exports strengthen and temporary energy sector
disruptions end. Annual growth in 2013 should be 1.9 percent,
compared with the previous 2.2 percent forecast, it said.