Canadian Manufacturing Rises But Remains in Contraction Territory

The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) provides insights into the state of the manufacturing sector in Canada. In October, the PMI increased to 48.6 in October from 47.5 in September, the first rise in three months. However, the PMI remains in contraction territory for the longest period since February 2016.

The manufacturing sector in Canada continued to face challenges, with both output and new orders declining. Higher costs were reported by firms, with the measure of input prices increasing to 55.1, its highest level since April.  

While manufacturers remained confident on average that output will rise over the coming 12 months, optimism was tempered and sank to its lowest level since May 2020 amid worries that high inflation and elevated interest rates will push economies into recession, leading to a further contraction of new orders and production.

 

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