According to a gauge by the Royal Bank of Canada, the country’s manufacturing industry reported healthy output in November 2014, as the rate of exports grew at a rapid pace. This growth pace was reported as being the fastest in over a year. These latest findings suggest that manufacturing facilities in Canada were still enjoying the benefits of a stronger economic recovery in its neighboring regions.
The RBC’s gauge of manufacturing activity in Canada was measured as being 55.3 in November 2014, which remained the same as the previous month. Economists regard a reading above 50 as being an indication of manufacturing activity growth. A reading below 50 indicates contraction in manufacturing activity.
Since April 2013, manufacturing activity in Canada has been recorded as being at level 50 or above. The RBC conducts a monthly survey to gauge industrial manufacturing activity on the basis of 400 industrial participants and primary consultations.
According to senior vice president and chief economist of RBC, the latest manufacturing activity data from Canada indicates that the sector has been witnessing consistent output, as well as increased employment. A strong jump in export orders has further buoyed this trend. Another aspect that works in the favor of the Canadian manufacturing industry is the competitive Canadian dollar and the strong American economy. Economists expect that this trend will continue as the manufacturing sector benefits from lower transportation costs and lower energy prices.
The latest survey also indicated that an increase in rising export orders has proven beneficial to manufacturers.
Exports in Canada have only rebounded in the last two quarters, indicating the strong demand from the United States has kept orders flowing in for Canadian manufacturers.