Are your clients feeling glum about the “R” word?
If so, the latest RBC Purchasing Managers’ Index survey might have some optimistic news for you to share with them. The survey shows a slow recovery in the manufacturing sector, which could have positive implications for the Canadian economy in the second half of the year.
“The RBC PMI indicates a second consecutive month of improving business conditions in July though still at a very modest pace and slightly below that achieved in June,” said Paul Ferley, the assistant chief economist at RBC. “As we enter the second half of the year, a strengthening U.S. economy and weaker Canadian dollar should provide a greater boost to exports and business conditions for manufacturers.”
This trend could indicate that the central bank’s second rate cut in a row did in fact help to stimulate the economy, counterbalancing falling oil prices by addressing the country’s terrible trade numbers.
“July’s survey highlights another steady upturn in manufacturing production and new order volumes, which leaves the sector well placed to remain on a recovery footing through the third quarter of 2015,” said Cheryl Paradowski, president and chief executive officer of the SCMA.
“Exchange rate depreciation and stronger U.S. consumer spending continue to help shore up demand for Canadian manufactured goods, in turn offsetting some of the momentum lost from weaker energy sector spending patterns.”
The analysis will likely encourage advisors, who’ve been inundated with tough questions about the economy, to look beyond the “Great Canadian Non-Recession” to brighter times in the third quarter.