Canadian Manufacturing Rose Slightly in December

The pace of growth in the Canadian manufacturing sector picked up slightly in December as orders for new work rose to the highest level in two years as companies saw greater demand in the auto and energy sectors, data showed on Tuesday.

The Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 51.8 last month from 51.5 in November. A reading above 50 shows growth in the sector.

While the figures pointed to only a modest improvement in business conditions, it was a better end to the year than the sector saw in 2015 when the fallout from the oil price crash put the index in contraction territory.

“Canada’s manufacturing sector ended the year on a much stronger footing than it started,” said Tim Moore, senior economist at survey compilers IHS Markit.

The new orders gauge increased to 52.6 from 52.2, its highest level since December 2014. Although new export orders rose only slightly to 50.9 from 50.6, it suggested exports were still seeing a rebound after declines over the third quarter, Markit said.

But input prices rose to the highest level in nearly two-and-a-half years at 60.2 from 59.7 as the Canadian dollar declined and commodity prices rose, putting pressure on companies’ operating margins.

via Globe and Mail

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza