Manufacturing holds steady. Image: Makino mould makingClick image to enlargeThe latest manufacturing statistics in Canada and the US for December 2014 point to continued, albeit slow growth.

The RBC Canadian Manufacturing PMI for December 2014 indicated that business conditions continued to show a solid improvement in the month although at a slower pace relative to November. The PMI is calculated as a diffusion measure with any reading above 50 indicating improving business conditions in the manufacturing sector. The higher the reading is above the break-even level of 50, the greater is the pace of improvement. The December index of 53.9 represented a solid improvement in business conditions although at a pace below that recorded in November, which had an index reading of 55.3.

According to Nathan Janzen, an economist with RBC Economics, the December data for the survey which also provides a reading on price pressures in terms of both inputs and outputs, indicated that output prices increased at a faster pace relative to November, with the index measure rising to 52.8 from 50.6 between December and November. Respondents indicated that firms were increasingly passing along higher input costs. The survey indicated that input prices continued to rise in December, with an index reading of 54.4, which was up marginally from the 54.3 recorded in November. The fact that the index has not shown greater weakness in recent months is surprising, given the steady decline in oil prices. Respondents commented that the upward effect on input prices largely emanated from a falling Canadian dollar.

The RBC PMI is also calculated for Ontario, Quebec, Alberta and British Columbia, and the "Rest of Canada." In December, three regions showed moderation in the pace of improvement in business conditions while the fourth, Quebec, showed a modest decline in sentiment following a slight increase in November. Specifically, the index for Quebec dropped to 49.3 from 50.3 in November. The recent decline in oil prices may have contributed to the measure for Alberta dropping to 54.7 from 55.7 in November, although it still indicated improving business conditions in the province at a relatively rapid pace. The "Rest of Canada" recorded an even greater drop to 54.7 from 57.8 between December and November. The index in Ontario dropped as well to 55.6 from 57.1 during the same period, although the province still enjoyed the fastest pace of improvement in confidence among all the regions.

he December PMI continued to indicate a solid improvement in business conditions in the month, although the pace slowed relative to November. Going forward, some downside risks are presented by the recent sharp declines in oil prices and attendant weakening in capital expenditure in the oil and gas sector. The weakness in investment is expected to be more than offset by both rising exports, responding to lower gasoline prices boosting the US economy, and strengthening Canadian consumer spending, benefitting from lower energy costs. Lower oil prices may have a material effect on regional performance, with growth in business conditions in Ontario likely continuing to outpace other regions of the country.

Manufacturing activity continues to grow in the US

Activity in the US manufacturing sector in December 2014 continued to grow, although at a slightly slower pace with the ISM measure for that sector dropping to 55.5 from 58.7 in November. Market expectations had been for a moderate easing to 57.5.

Although the ISM-manufacturing index moved lower in December, it remained at a historically high level. The average index level during the fourth quarter of 2014 of 57.7 is up from both the weather-related weakness in the first quarter of 52.7 and the index reading from a year ago of 56.7. The implied strong pace of growth in the manufacturing sector bodes well for overall GDP growth to remain at an above-potential rate in 2015. Confirmation of such is expected to contribute to the Fed returning to tightening mode. Our forecast assumes fed funds will start to rise from its current range of 0% to 0.25% in the second quarter of this year. By the end of 2015, we expect the fed funds rate to have risen to 1.00 per cent.

RBC Economics

CWB adds automotive collision technician program

CWB Consulting has announced a new training and welding qualification program for the automotive collision repair sector.

Ottawa invests $9 M for skills training in Ontario

The Federal government has committed $9 million to help support skills training in manufacturing in southern Ontario.

James Rogowski named vp, technical services at TRUMPF

James Rogowski has been named vice president, technical service for TRUMPF Inc., Farmington, CT.

UAW joins Canada autoworkers’ call to boycott GM cars made in Mexico

The United Auto Workers has joined autoworkers’ union Unifor in calling on General Motors to keep North American plants running.

Robotic air cooled guns

Tregaskiss has introduced the third evolution of its Tough Gun robotic air cooled MIG gun product line, the Tough Gun CA3 and Tough Gun TA3.

Thick plate welding

The MIG/MAG Narrow gap technology from Cloos Robotic Welding for welding thick-walled component parts. In comparison to conventional weld seam preparation, the weld seam volume can be reduced by about 60 per cent, according to the company, reducing welding time and providing a saving potential with regard to the filler material, shielding gas and power consumption. 

Fluid reclamation

The portable inline fluid reclamation machine provides complete coolant restoration and rejuvenation treatment of metalworking fluids in the machine tool sump with minimal operator interface. >

Crunching the Numbers: Automating job estimation

by Andrew Brooks

Automating job estimation makes the process faster and more accurate – and keeps costs on a tight leash

CTMA launches new trades mentoring award

Igor Babamov of Advanced Machining Services Inc., Windsor, ON, is the first recipient of a new award that recognizes mentors of skilled trades people.

Two Toolmakers, Going Crazy

The Problem: Breaking the machine shop status quo without breaking the bank

The Solution: A universal machining centre

Western Canada job shop embraces a new vision with five axis machining technology from Haas

Italian machine tools see modest increase

The Italian machine tool industry saw a modest rise in exports of machine tools, but domestic demand remained flat in the fourth quarter of 2013, according to the latest figures from the Italian machine tool association, UCIMU.

Mitutoyo, API partner for metrology distribution

API and Mitutoyo Corp. are partnering to distribute API’s portable dimensional metrology equipment through Mitutoyo’s global network.

A German Solution for Canadian Manufacturing

Canadians head to Germany for new machining innovations

A visit to DMG’s Pfronten, Germany, facility makes it clear that the resurgence in manufacturing is not just wishful thinking but a reality.

Joint machine tool open house draws crowds

The Joint Open House, an annual event organized by Canadian machine tool distributors, was once again, a big success among manufacturers drawn to the event to see the more than 60 CNC machine tools under power.

Fast setup with new punch holders

Wilson Tool launched an innovative, yet simple approach to punch holding at the recent FABECH 2011 show in Chicago, IL.

Stay In Touch

twitter facebook linkedIn