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The pace of growth in the Canadian manufacturing sector slowed to a nine-month low in October according to the latest data from the Markit Canada Manufacturing Purchasing Managers index (PMI). The report attributes the slow down to businesses' supply chain disruption caused by a hurricane in the U.S.  which saw export orders contract.

“Manufacturing growth was sustained in October, but there were signs that momentum has eased back from the peaks seen during the summer," says Christian Buhagiar, president and CEO, Supply Chain Management Association (SCMA). "The latest expansion of production volumes was the slowest since the start of 2017, reflecting a more modest upturn in new orders. Export sales were particularly subdued, meaning that manufacturers were reliant on domestic demand to drive growth during October. “Meanwhile, supply chain issues persisted as hurricane-related disruptions resulted in longer lead times for raw materials and upward pressure on input prices. “The main bright spot in October was the continued robust growth experienced in Western Canada. Manufacturers in Alberta & British Columbia reported the fastest expansion of employment numbers for over six years as firms sought to boost capacity in response to rising demand.”

The Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, declined to a seasonally adjusted 54.3 last month from 55.0 in September, the lowest level since January. A reading above 50 shows growth in the sector.

According to a Reuters story, the manufacturing sector continued to feel the effects of Hurricane Harvey, which hit Texas in late August. This meant longer supplier delivery times for Canadian firms, with the gauge contracting further to 40.4 from 40.6.

Forward-looking new orders declined to 53.2 from 54.9, while new export orders contracted to 49.8 from 51.3 as firms cited less international demand. It was the first time export orders have fallen below 50 since last October.

Total new business did expand for the 13th month running, but that was offset by the decline in export orders.

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