Canada Manufacturing Growth Falls to Lowest in 10 Months

The S&P Global Canada Manufacturing PMI fell to 49.6 in October 2026 from 51.5 in September, signalling the first contraction in 2026 so far. Production declined for the first time since March, as delivery delays caused the sharpest deterioration in supplier delivery times since August 2022. Manufacturers increasingly relied on existing inventories, with stocks of purchases falling for a second consecutive month. New orders contracted at the fastest pace in over a year, as tariffs and geopolitical uncertainty weighed on domestic and export demand. New export orders fell for a fifth straight month, recording their steepest decline since January. Meanwhile, input cost inflation accelerated to its highest level since June 2022, driven by tariffs and rising fuel prices. Manufacturers passed on higher costs, pushing output price inflation to a more than four-year high. Employment fell for the first time since March. Business confidence remained historically subdued.

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.