Subdued business confidence at the end of the year played a part in weak manufacturing performance.
Canadian manufacturers experienced a slightly slower downturn in overall business conditions than the survey-record low seen during October.
Canadian businesses can expect a 7% increase in the value of their exports in 2016 following a 1% decline this year.
Canadian manufacturers indicated further deterioration in overall business conditions during September, with output, new business and employment levels all falling since the previous month, according to the RBC PMI for September.
The RBC Canadian Manufacturing PMI registered 49.4 in August, down from 50.8 in July and the lowest reading since May.
Quebec's economic outlook is improving.
In January, the Canadian manufacturing sector slowed down.
Business conditions at Canadian manufacturing companies continued to improve at the end of the year, with output and new orders rising further, according to the RBC Canadian Manufacturing Purchasing Managers' Index (RBC PMI).
Orders to U.S. factories for long-lasting manufactured goods rose in October, but a key category that tracks business investment plans declined sharply for a second straight month.
The manufacturing sector rebounded in October.