The RBC manufacturing Purchasing Managers' Index (PMI) for Canada decreased to 48.0 in October from 48.6 in September. A reading below 50 indicates contraction of activity.

The index was driven by declines in output, new orders and employment.

"As we move toward the end of the year, we expect that a strengthening U.S. economy and weaker Canadian dollar will fuel demand for Canada's exports, resulting in a shift to positive growth territory," senior vice president and chief economist at RBC, Craig Wright, said.