Canada Factory Activity Contracts for 4th Month

The S&P Global Canada Composite PMI recorded 47.1 in February 2026, up from 46.4 in January and remaining below the 50.0 no-change mark for a fourth straight month. Manufacturing improved to 51 from 50.4 in February, while services rose to 46.5 from 45.8, with the latter the main driver of the downturn. New business volumes declined for a fifteenth consecutive month and continued to weigh on output. Backlogs of work decreased markedly again as firms were easily able to keep on top of workloads. Employment contracted for a sixth successive month, albeit modestly, as firms pared staff or chose not to replace leavers. Business confidence edged up since January and reached its highest level since last October. On the price front input cost inflation softened to its lowest level since September 2024, while output charge inflation rose solidly and reached its greatest degree since July 2025.

The S&P Global Canada Composite PMI recorded 46.4 in January 2026, down from 46.7 in December and remaining below the 50.0 no-change mark for a third straight month. Manufacturing stabilised in January, while services fell to 45.8 from 46.5, with the latter the main driver of the downturn. New business volumes declined for a fourteenth consecutive month and continued to weigh on output. Backlogs of work decreased markedly again as firms were easily able to keep on top of workloads. Employment contracted for a fifth successive month, albeit modestly, as firms pared staff or chose not to replace leavers. Business confidence softened since December and remained well below trend. On the price front input cost inflation softened to its softest rise since November 2024, while output charge inflation remained solid and little-changed compared with December.

The S&P Global Canada Composite PMI recorded 46.7 in December 2025, up from 44.9 in November but remaining below the 50.0 no-change mark for a second straight month. Manufacturing edged up to 48.6 in December from 48.4 in November while services rose to 46.5 from 44.3, with the latter still the main driver of the downturn. New business volumes declined for the thirteenth consecutive month and continued to weigh on output. Backlogs of work decreased but to a much lesser degree than in recent months as firms operated with spare capacity. Employment was cut for a fourth successive month, with the rate of job losses slightly weaker than in November as firms pared staff. Business confidence improved but remained well below trend. On the price front input cost inflation remained elevated and little changed since November while output charge inflation rose solidly but at a pace that stayed below trend.