Canada PMI Signals Solid Factory Expansion

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.

The S&P Global Canada Manufacturing PMI remained in growth territory for a second straight month at 52.9 in May 2026, down slightly from 53.3 in April but still above its long-run average. The sector was supported by further increases in output and new orders, as firms reported stronger demand and success in attracting new customers. Employment also continued to rise, with some manufacturers citing pressure on existing capacity. However, inflationary pressures intensified, with both input and output price measures climbing to near four-year highs. At the same time, supplier delivery times deteriorated sharply as the conflict in the Middle East disrupted supply chains. Despite ongoing growth, business confidence remained subdued amid concerns about costs and the broader economic outlook.

The S&P Global Canada Manufacturing PMI rose to 53.3 in April 2026 from 50.0 in March, marking the strongest improvement in business conditions since June 2022. Production growth reached its highest level since May 2022, while new orders expanded at the fastest pace in over four years, fueled by a sharp increase in new export orders, the strongest since early 2022. This surge was largely driven by client stockpiling due to concerns over product availability, supply chain disruptions, and price pressures linked to the Middle East conflict. Input buying also rose at the steepest rate since June 2022, while employment levels saw a slight increase and vendor delivery times lengthened at the greatest rate since March 2025. On the price front, input costs rose at the fastest pace in over three-and-a-half years, with fuel and freight transportation costs contributing to the upward pressure. Finally, business optimism improved to a 16-month high.