Canada's Manufacturing Sector Slows Down Amid Ongoing Trade Tensions with US
Canada's manufacturing sector has continued to show resilience in September, but momentum appears to be slowing due to escalating trade tensions with the United States. The country's Manufacturing Purchasing Managers' Index (PMI) was 51.5 for September, its lowest level since March.
The PMI measures operating conditions in the sector and any reading above 50 represents growth. This marks the sixth straight month of expansion, but the index declined from 53 in August. S&P Global Market Intelligence attributed the decline to challenging market conditions, including the war in Iran and ongoing trade tensions with the U.S.
Paul Smith, economics director at S&P Global Market Intelligence, noted that despite challenges, Canada's manufacturing economy showed resilience in September. Output rose, and firms showed a willingness to backfill vacancies with skilled workers to support recent long-term contract wins.
However, tariffs and elevated global energy prices continued to have a damaging impact on the sector. Input cost inflation accelerated to its highest level since July 2022, while supplier delivery times lengthened to a degree not seen in over four years.