TORONTO - A monthly gauge of Canadian purchasing managers slipped in November, indicating the manufacturing sector's weakest rate of growth in two years of data collection.
The RBC-sponsored index, compiled in association with Markit and the Purchasing Management Association of Canada, dropped to 50.4 from 51.4.
As with other purchasing manager indexes compiled in other countries, a reading below 50 signals contraction while a higher number indicates growth.
Craig Wright, RBC's chief economist, said the difficulty experienced by manufacturers in Canada last month likely reflects continued uncertainty about the global economy.
"We expect the economic weak patch to be short lived, however. As the downside risks plaguing the global economy start to ease, so will some of the weight on Canadian export demand and the broader manufacturing sector," Wright said.
The RBC PMI data showed a month-over-month decline in production output combined with a halt in growth in new orders, said Cheryl Paradowski, president and chief executive of the Canadian Purchasing Management Association.
"This reflected weaker domestic and export market conditions," Paradowski said. "Nonetheless, firms continued to hire additional staff, although the rate of job creation slowed for the sixth month running and was only modest."
Markit compiles PMI surveys for 32 countries and for key regions such as the eurozone, as well as the one published by Royal Bank of Canada (TSX:RY) in co-operation with the PMAC industry group.
The HSBC China Manufacturing PMI, also released on Monday, improved to 50.5 in November, up from 49.5 in October. It was the first improvement in operating conditions for the world's second-biggest economy in 13 months.
Markit's index of U.S. purchasing managers rose to a six-month high of 52.8 last month, up from 51.0 in October. A more widely known U.S. index compiled by the Institute for Supply Management fell to 49.5, from 51.7 in October.