Growth in both output and orders accelerated last month, according to official and private factory surveys on Wednesday, giving the government more room to focus on tackling financial risks to the economy as debt continues to rise.
At 54.7 in February, up from 53.5 in January, the seasonally adjusted Markit Canada Manufacturing Purchasing Managers’ Index (PMI) signalled the strongest improvement in business conditions since November 2014.
Justin Benson, a director in KPMG’s manufacturing practice, said: “With another month of PMI data above the long-run average, and solidly in expansion territory, manufacturers must surely have a spring in their step this month”.
However, the figure remained close to December’s two-and-a-half-year high.
“The survey results suggest that manufacturing will contribute to a strengthening in overall economic growth in the first quarter”, IHS Markit economist Trevor Balchin said.
Companies raised their staffing numbers further in February, with headcounts rising at SMEs and large-scale manufacturers.
Although export orders rose, the increase wasn’t big enough to make up for the shortfall in domestic business.
This largely reflected a moderation in new order growth from January’s 28-month peak, alongside a slightly softer increase in output volumes.
No, there’s no sign of a slowdown yet, and perhaps explains why commodity prices – broadly – continued to push higher in February.
A preliminary estimate released last month had the PMI at 55.5.
Growth of new business was also linked to a fifth successive monthly rise in backlogs of work.
Economy grew 2.4% from a year earlier, compared with a forecast 2% increase.
Job shedding was evident in Malaysia’s manufacturing sector for the first time since August 2016, albeit at a relatively moderate pace. “This is likely to cause demand from price-sensitive consumers to fall and could potentially jeopardise the economic recovery”.