Canadian manufacturers experienced another modest upturn in overall business conditions in May, which marked three months of sustained improvement, according to the RBC PMI.

Output growth expanded at its fastest pace for almost one year, but the latest survey pointed to slightly weaker rates of new business and employment growth. There were also signs of pressure on operating margins as input cost inflation accelerated in May, while output charges were broadly unchanged.

Regional highlights include:

• Manufacturing business conditions improved in all regions except Alberta and B.C.
• Quebec recorded the steepest upturn in production, with output growth reaching a 21-month high
• Ontario experienced softer growth momentum than in April, but remains the best-performing region in terms of export sales and jobs growth