Canada Factory Activity Stagnates in March

The S&P Global Canada Manufacturing PMI fell to 51.5 in September 2026 from 53 in August, falling to its lowest level in six months. Output continued to rise, albeit more modestly, as firms noted a degree of client hesitation. New export orders declined for a fourth consecutive month amid weaker demand from US clients due to increased trade frictions. Customs delays and difficulties at the US border, the conflict with Iran, and demand related to AI were also reported to have added strain to already stretched supply chains. Delivery delays were the most widespread since August 2022, while vendors reported shortages of available stock. As a result, firms drew down existing inventories, contributing to the first decline in stocks of purchases in six months. Product shortages and high energy prices pushed input costs higher, with inflation reaching its highest level since mid-2022. Confidence deteriorated to its lowest level since December 2025 as multiple headwinds weighed on sentiment.

The S&P Global Canada Manufacturing PMI edged lower to 53.0 in August 2026 from 53.5 in July, remaining above the 50.0 no-change threshold for a fifth consecutive month. Production and new orders both increased for the fifth straight month, with output growth accelerating to its fastest pace since April. Employment also rose, with job creation reaching its strongest level since October 2024. Manufacturers increased purchasing activity and marginally raised input inventories, partly reflecting precautionary buying amid concerns over prices and product availability. Input cost inflation remained elevated despite easing, while output price inflation also slowed from July. Meanwhile, business confidence strengthened in August, reaching its highest level since late 2024.

The S&P Global Canada Manufacturing PMI edged up to 53.5 in July 2026 from 53 in June, the highest since June 2022, defying expectations of a decline to 50.2. The reading signaled a fourth straight month of expansion, supported by stronger output and new orders amid improved domestic demand, although export orders fell for a second consecutive month due to tariffs and the conflict in the Middle East. Input cost inflation accelerated to a four-year high as supply shortages and delivery delays intensified. Higher demand added further strain to supply chains and upward pressures on prices, prompting manufacturers to raise selling prices amid higher purchasing activity. Firms also increased hiring to meet stronger demand, while inventories of finished goods rose partly reflecting shipping delays. Despite continued growth in sales and production, business confidence eased to a four-month low as firms remained concerned about rising costs and geopolitical uncertainty.