Canada Factory Activity Expands After 11-Month Rout

The S&P Global Canada Manufacturing PMI fell to 50.0 in March 2026 from 51.0 in the previous month signalling a stagnation of manufacturing sector performance and ending a two-month period of improvement. Output declined for the first time in 2026 as new order volumes returned to contraction with high prices and ongoing headwinds from US tariffs continuing to weigh on export sales. Consequently subdued trends in orders led to a marginal net fall in staffing levels for the first time in three months as firms adjusted operational capacity and showed a reluctance to replace leavers. Meanwhile input price inflation accelerated to its highest level since last August driven by rising fuel and supplier charges from the war in the Middle East though output charge inflation softened to a three-month low. Looking forward uncertainty caused by the conflict and persistent tariff concerns saw confidence in future output fall to a three-month low.

The S&P Global Canada Manufacturing PMI rose to 51.0 in February 2026 from 50.4 in the previous month, marking the second month of improvement and recording a 13-month high. Output stabilised in the period even as new order inflows returned to growth for the first time in over a year, with domestic demand helping to offset a sustained decline in export sales amid ongoing headwinds from US tariffs. Consequently, improved order books gave way to the fastest rise in staffing levels for 13 months, as firms boosted capacity in response to greater workloads and expansion plans. Meanwhile, input price inflation accelerated to a six-month high, driven by rising costs for steel and aluminum, and pushed firms to raise their output charges to the greatest degree since March 2025. Looking forward, confidence in future output improved to the highest level since December 2024.

The S&P Global Canada Manufacturing PMI rose to 50.4 in January 2026 from 48.6 in the previous month, marking the end of an eleven-month downturn and recording a 12-month high. Output stabilised in the period even as new order inflows fell only marginally, the weakest reduction in 12 months, with panellists citing persistent market uncertainty and tariffs from the United States weighing on trade. Consequently, lower capacity demand gave way to a marginal net gain in staffing levels for the first time in a year, with some firms taking on staff in expectation of higher output. Meanwhile, input price inflation accelerated to a five-month high and drove firms to raise their output charges to the greatest degree since March 2025. Looking forward, confidence in future output improved to a three-month high.