TORONTO – A measure of Canadian manufacturing intentions had its biggest increase in five months in February, although it suggests growth will likely be modest.
The RBC Canadian purchasing managers index rose to 51.7, the second monthly increase in a row and the strongest since September.
RBC noted, however, that the February reading was below the 53.6 average since the index was begun.
Royal Bank of Canada (TSX:RY) publishes the index with the Purchasing Management Association of Canada and Markit, a global information company.
The RBC PMI found manufacturing output and new orders to Canadian manufacturers were up in February as was hiring among firms surveyed.
However, RBC noted that January marked a one-year low in hiring intentions.
Meanwhile, the quantity of inputs bought by manufacturers was unchanged from January and the rate of inflation for input costs was the weakest since July 2012.
RBC chief economist Craig Wright said a key reason for the improvement was greater demand from the United States, Japan and China.
“While it would be premature to suggest that the global economy is treading on a much brighter path, these modest improvements hint that better days may lie ahead,” Wright said.