Canada Factory Activity Stagnates in March

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.

The S&P Global Canada Manufacturing PMI held at 53.0 in June 2026, little changed from 52.9 in May, pointing to a third straight month of solid expansion in factory activity. Output and new orders rose for a third consecutive month, supported by new product launches, although firms noted that tariffs continued to weigh on demand and export orders fell for the first time in three months. Backlogs increased, prompting manufacturers to expand payrolls at the fastest pace since October 2024. Purchasing activity also rose as firms sought to secure inventories and avoid further supplier price hikes. Supply chain delays worsened to the highest level since September 2022, largely linked to shipping disruptions from the Iran conflict. Input cost inflation accelerated to its highest since July 2022, driven by oil, transport costs and tariffs. Business confidence remained positive but fell to a three-month low amid uncertainty over US trade policy.